Working Paper: CEPR ID: DP12803
Authors: Chris Minns; Joan Ross
Abstract: Economic historians have long signalled the importance of location-specific resource booms in the Canadian development experience, but a full analysis of the dynamics of Canada’s internal income dynamics is conspicuously absent. This article presents comprehensive estimates of regional inequality in Canada from 1890 to 2006 and assesses the sources of convergence and divergence across Canadian provinces. Our convergence decompositions support the central role of resource booms in accounting for regional income dynamics, and show that structural change contributing relatively little to the development process. Our findings are in sharp contrast to the historical experience of other countries, including the United States.
Keywords: regional inequality; resource booms; structural change; random growth theory; Canada
JEL Codes: N91; N92; R12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| resource booms (Q33) | regional income dynamics (R11) |
| within-industry labor productivity convergence (O47) | changes in relative labor productivity among Canadian regions (O51) |
| productivity trends in primary product sectors (O13) | regional income dynamics (R11) |
| lack of significant linkages from primary sector to other sectors (L79) | regional income dynamics (R11) |
| Gini index for regional income inequality greater in 2006 than in 1890 (D31) | persistent regional disparities (R23) |