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September/October 1988, 
Vol. 70, No. 5
Posted 1988-09-01

Why Have State Per Capita Incomes Diverged Recently?

by Cletus C. Coughlin and Thomas B. Mandelbaum

Cletus C. Coughlin and Thomas B. Mandelbaum find that the recent increase in income inequality stems from the rapid growth in 10 high-income Atlantic Coast states along with relatively slow growth in 10 low-income states scattered throughout the nation’s interior. After considering several explanations of regional growth, including the movement of industrial activity from the Frost Belt to the Sun Belt and the “farm crisis,” the authors conclude that declining energy prices during the 1980s were the primary contributor to the rising inequality of state per capita income.