Abstract
In the past 20 years, regional differences in per capita incomes in the 9 census divisions have decreased in real terms. Relative to the national average, the greatest gains have occurred in the South, while the greatest declines have been in the Northeast and Pacific states. Contributing factors have been: 1. changes in the proportion of the population employed, 2. changes in transfers and property income per capita, and 3. changes in earnings rates, this being the most influential. Until the mid-1960s, earnings gains in the low income areas were predominantly from a movement out of the farm sector into higher wage nonagricultural employment. Since that time, the increase has generally been in the form of rising wages. The other low income divisions, the West North Central and Mountain, have not experienced comparable increases because of the initial high ratio of farm to nonfarm earnings. The relative decline in high income divisions reflects a deterioration in the full employment wage, accounted for by slow capital formation and the 1970 and 1975 recessions.