Abstract
Over the last several decades, the fortunes of regions and communities across the United States have stopped converging. Evolving patterns of trade and technology, among other factors, have created concentrated prosperity while leaving many places behind. In order to formulate an effective policy response at the local, state, and federal levels, it is necessary to understand how economic activity has shifted, as well as the factors that are associated with success or failure for particular places. To present a full picture of which places are thriving, how that picture has changed over time, and what factors are associated with success or failure, we created the Vitality Index, which measures the economic and social well-being of a place. We find that places in 1980 with higher levels of human capital, more diverse economies, lower exposure to manufacturing, higher population density, and more innovative activity tended to have higher vitality scores in 2016. Further, both the differences in fiscal capacity among states and declining migration rates can reinforce differences in economic outcomes across places. The analysis in this chapter underscores the complicated overlap of gaps across places: differences across regions, states, and counties are all substantial, as are differences within counties.
