5.1.1. Persistence of Income Differentials Among States over Time

Overall, the rank order of the states with respect to state average income has remained strikingly stable over time. The richest third (i.e. the top 17 states) in 2003 includes 13 of the 1913 wealthiest states. In addition to listing the high-income states, Table 5.1 displays the corresponding income per household expressed in 2003 dollars. The state names that do not appear in both the columns have been grayed out.

Table 5.1. High-Income States in 1913 and 2003

This secular persistence of income discrepancies across states generalizes what Perloff, Dunn, Lampard, and Muth (1967, p. 502) found for per capita income by state, annually from 1920 to 1935. The authors noted that “there has been remarkably little change in income differences among states over these years. While it is true that some states have had more rapid increases in per capita income than others and there has been a tendency toward equalization of differentials in relative terms, the narrowing of the differentials appears to be related primarily to short-run fluctuations and year-to-year random movements.” The authors point out two economic upheavals featuring the time-period 1920-1935: 1) the Great Depression, and 2) the inflationary spiral that occurred in the aftermath of World War II.