SECTORAL SHIFTS AND U. S. REGIONAL ECONOMIC GROWTH, 1952-73

The primary objective of this study was to determine the factors most significantly contributing to the convergence in North-South per capita incomes during the 1953 to 1973 period. The study centered on the linkages which existed between regional economic structure and regional economic growth with particular emphasis placed on sectoral and sectoral-shift analysis.;After 1953, the service-producing sector grew dramatically relative to both the goods-producing and agricultural sectors. This led regional economists to conjecture that the sectoral-shift pattern within regions was changing in favor of the service-producing sector away from manufacturing, and that this pattern was strongly influencing the regional per capita income convergence process.;This dramatic growth in the service-producing sector, however, was found not to be a factor directly affecting the general tendency towards regional per capita income convergence. Notwithstanding this finding, the indirect effects of this dramatic growth were found to be quite important to the explanation of the convergence process during the period. Principally, it was found that the rapid expansion of the service-producing sector adversely affected the wage structure of the nondurable goods industries of the North, causing large numbers to either close down or to relocate to the South where wage and tax structures were more favorable. This growth in the nondurable goods industry sector in the South was found to be the factor most strongly associated with the high levels of growth in per capita incomes of the South.;Other lesser important factors found to be influencing the North-South per capita income convergence pattern included a relatively higher growth rate in the service-producing sector wage level in the South, substantially greater relative declines in agricultural employment in the South, and a relatively higher growth rate in population in the South relative to the North.;In periods prior to 1953 per capita income convergence had been most strongly influenced by agriculture's demise and by rapid expansion in manufacturing employment. In the South where per capita incomes were the lowest, and grew most rapidly during the period, agricultural employment declined relatively more and manufacturing employment increased relatively more than did employment in those sectors in the North.