Demographic and Per Capita Income Dynamics: A Convergence Study on Demographics, Human Capital, and Per Capita Income for the US States

This paper finds that age distribution, educational attainment, and government size converge across the US states at rates rather similar to the convergence rate for per capita income. The main part of the paper takes age distribution variables as exogenous in conditional convergence regressions. Using panel data, the estimated partial relation between age and the subsequent growth rate of per capita income is hump-shaped and of quantitative importance. This result is robust to conditioning on other variables and appear not only to reflect capital-dilution. Another result is that average years of schooling has a positive effect on growth only if age distribution is controlled for. These findings are consistent with an explanation that the age distribution reflects the growth effects of human capital accumulated through experience.