Determinants of State Labor Productivity: The Changing Role of Density

This study examines the determinants of state labor productivity during the 1989 to 2000 period. Using the model developed by Carlino and Voith (1992), we estimate how state cha-racteristics such as population density, education, industrial structure, and business amenities (such as crime rates), influence state labor productivity. We also estimate our model over two sub-periods (1989 to 1995 and 1996 to 2000) in order to isolate the labor productivity boom of the late 1990s. Our aggregate results for the full 1989 to 2000 period were consistent with pre-vious research. However, the determinants of labor productivity changed during the produc-tivity boom of the late 1990s. During the period 1996 to 2000 greater industrial diversity ap-peared to have stimulated labor productivity, whereas in the earlier period, 1989 to 1995, spe-cialization promoted labor productivity. Finally, while population density contributed to labor productivity during the earlier period, population density proved not to be a statistically sig-nificant determinant of labor productivity during the period 1996 to 2000.

Publication Information
Article Title: Determinants of State Labor Productivity: The Changing Role of Density
Journal: Journal of Regional Analysis and Policy (Oct, 2009)
Author(s): Thompson, Eric;  Decker, Christopher S.;  Wohar, Mark E.
Researcher Information
Thompson, Eric
Thompson, Eric
Karl H. Nelson Associate Professor of Economics, Director of the Bureau of Business Research
  • Bureau of Business Research
  • Regional Economics
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