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Abstract
Using data on the manufacturing sector for the 50 states during 1977-1996, we decompose
labor productivity growth into changes due to enhanced efficiency, capital accumulation,
and technological progress. We find some evidence that labor productivity is converging
among the 50 states, although the variance of labor productivity increased during 1977-1996.
Using a series of kernel distribution tests we find that capital accumulation and technological
progress contributed to labor productivity growth during the period, but changes in state efficiency
had no effect on productivity growth.