State Per-Capita Income Change Since 1950: Sharecropping's Collapse and Other Causes of Convergence (Contributions in Economics & Economic History)

This book refutes prevailing theories that attribute post-1950 state per capita income convergence to (1) neo-classical adjustment mechanisms, (2) institutional sclerosis, and (3) southern industrialization. Wheat and Crown argue that southern income was low because of slavery's legacy—sharecropping, agricultural dependence, low urbanization, poor education, high Black population percentages, and low wage rates. The legacy's dominant feature was the sharecropper-tenant farmer system, which replaced slavery. Sharecropping was the foundation of southern poverty. Sharecropping's collapse, beginning around 1950, affected all of the other features of slavery's legacy. For example, millions of sharecroppers out-migrated from the South, shifting poverty to the North and lowering the South's Black percentage. This out-migration, white in-migration, and the civil rights movement jointly raised educational attainment in the South, further boosting southern income. Southern industrialization had only a marginally significant effect. In 1950's high income region, the West, the transport cost element in the price of manufactured goods shrank because of (1) transportation improvements and (2) rapid manufacturing growth, which reduced the need for long distance imports from the Manufacturing Belt. The resulting decline in the West's relative cost of living led to wage adjustments. Consequently, the West—despite having the highest manufacturing growth rates—had the nation's lowest per-capita income growth rates. Agricultural decline and educational gains stimulated income growth in the Plains. Nationally, per-capita employment gains were a strong influence.

Focuses on the rise of incomes in the southern states, where they have been lower than any other region since the Civil War. Identifies the legacy of slavery and other factors that have kept incomes low, and provides evidence that the rise over the past few decades is a result of the collapse of the sharecropper- tenant farmer system of agriculture. Other studies have examined the causes of income disparities, but few have considered the recent convergence, and none has proposed the end of sharecropping as the cause.
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Wheat and Crown attribute state per-capita income convergence to factors other than those emphasized in the income literature. As such, the book will be of particular interest to regional economists and southern economists.

The authors refute prevailing theories that attribute post-1950 state per-capita income convergence to (1) neoclassical adjustment mechanisms, (2) institutional sclerosis, and (3) southern industrialization. In the South, Wheat and Crown contend that sharecropping's collapse stimulated income in many ways. In the West, transport cost developments inhibited income growth, while in the Plains, changes in agriculture and education counted most.

Includes bibliographical references (p. [173]-176) and index.

LEONARD F. WHEAT is an economist with the Economic Development Administration of the U.S. Department of Commerce.WILLIAM H. CROWN is Associate Professor at Brandeis University.

Introduction

Empirical Studies Explaining Income

Theoretical Explanations of Income Convergence

Hypotheses and Preliminary Evidence

Methodology, Variables, and Correlation Findings

Regression Analysis

Further Analysis, Summary, and Conclusions

Index