From the Fed:
How does California’s economic performance compare with that of other states? Consider two of the main barometers of state economic performance: economic output and jobs. Typically, when a state’s economy expands, we expect the number of jobs to grow to the same extent. But from 1990 to 2011, California’s growth did not follow this pattern. Economic output in California grew faster than in many states, while job growth was slower than most states….Evidence suggests that the reason California has experienced faster economic growth than job growth is that employment has shifted to high-wage industries. (David Neumark is Chancellor’s Professor of Economics and director of the Center for Economics & Public Policy at the University of California, Irvine, and a visiting scholar at the Federal Reserve Bank of San Francisco. Jennifer Muz is a Ph.D. candidate at the University of California, Irvine.)

For the full story, please visit http://www.frbsf.org/publications/economics/letter/2013/el2013-11.html.