Productivity divergence: state policy, corporate capture and labor power in the US

Authors: Mildred E. Warner, Cornell University, Yuanshuo Xu*, Zhejiang University
Topics: Economic Geography, Political Geography, Regional Geography
Keywords: Corporate Lobbying Power, Unionization, Inclusive Growth, State Rescaling, Economic Productivity
Session Type: Virtual Paper
Day: 4/8/2021
Start / End Time: 8:00 AM / 9:15 AM
Room: Virtual 59
Presentation File: No File Uploaded


What factors explain the divergence between returns to labor and overall productivity across US counties? We model the role of power at the subnational state level: Republican partisan control, corporate lobbying (measured by ALEC-sponsored bills) and labor power (unionization). We find where state policy is captured by corporate interests, this undermines inclusive growth. Our hierarchical models use 2012 data for county areas in the continental USA and find labor returns are higher in states with more unionization, but lower in states with Republican control and more corporate penetration of state legislatures. Labor and local government power have limited effect.

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