Recovery from the Great Recession: Explaining Differences Among the States

The recovery from the Great Recession has been slow compared to previous recoveries. However, at the state level the pace of improvement has varied considerably. This study in-vestigates the reasons for the variation in state economic recovery from the Great Recession by identifying determinants of two performance measures: growth in state real gross domestic product (GDP) and growth in state nonfarm payroll employment. The results showed that economic structure of the state matters; in particular, states with relatively larger GDP shares in agriculture, energy, financial services, and durable manufacturing (especially for motor ve-hicles and parts) had faster GDP growth, while concentrations in financial services and dura-ble manufacturing were associated with greater employment growth. States increasing indi-vidual income and corporate income taxes during the recession and recovery had slower GDP and job growth, while states increasing minor taxes and fees had a faster GDP recovery. Last-ly, states receiving more funds from the American Recovery Act experienced faster recoveries in both GDP and jobs.


Issue Date:
2014
Publication Type:
Journal Article
PURL Identifier:
http://purl.umn.edu/243972
Published in:
Volume 44
Issue 2
Journal of Regional Analysis and Policy
Page range:
166-174




 Record created 2017-04-01, last modified 2017-08-22

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