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II. BACKGROUND
When most people think of rural areas in America, they picture an agrarian landscape dotted with farms or forests. Historically, rural areas have been viewed as containing relatively homogeneous cultures and were assumed to depend on farming and natural resource extraction for their economic livelihood. In fact, rural America displays great cultural and economic diversity and is home to many different economic activities, including farming, mining, manufacturing, and services.
DEMOGRAPHICS OF RURAL AMERICA
Demographic trends suggest that nonmetropolitan2 America is proportionally older and more racially homogeneous than urban America. In 1990, in America’s nonmetropolitan counties (U.S. Census, 1990):
- 16 percent of the population was age 65 or older, compared to 12 percent in metropolitan counties.3
- 88 percent of residents were white, 8 percent were African American, 2 percent were American Indian or Alaska Native, and less than 0.5 percent were Asian and Pacific Islander.
- 4 percent of the population identified themselves as Hispanic.4
Female-headed households are the fastest growing household type in rural areas, and the proportion of rural female-headed households now rivals that of urban areas. Since 1980, the birth rate among rural unmarried mothers has risen faster than among urban unmarried mothers, thus narrowing the urban-rural difference the birth rate of unmarried mothers.5 Rural mothers are more likely to be teenagers than their urban counterparts: in 1994, 1 out of every 9 infants born in rural areas had an unmarried teenage mother, compared with 1 out of every 10 infants born in urban areas (Frenzen and Butler, 1997).
Adult residents in rural areas have lower education attainment levels than those in urban areas. In 1997, of the population 25 years and older, rural residents had less education than urban residents (Exhibit 3). Although rural areas have high school graduation rates that match or better those in urban areas, fewer students in rural areas attain a college degree (Gibbs et al., 1998). In many cases, those with higher educational levels seek and find employment outside their rural home communities (Lichter et al., 1995), although this outmigration trend seems to have slowed or reversed itself over the past decade (Nord and Cromartie, 1998).
| Attainment | Metropolitan Areas | Nonmetropolitan Areas |
|---|---|---|
| High school graduate or more | 83.4 | 76.8 |
| Some college or more | 58.0 | 35.3 |
| Bachelor's degree or more | 26.0 | 14.8 |
| Source: Day and Curry, 1998. |
RURAL EMPLOYMENT
Rural America accounts for 76 percent of all counties, 83 percent of the nation’s land, and 25 percent of the nation’s population. Less than 10 percent of the rural population lives on farms. From 1969 to 1996, the proportion of the rural population employed in farming declined by half (from over 14 percent to just under 7 percent). In nonmetropolitan areas, jobs in the service sector account for the largest portion of employment, followed by retail, manufacturing, and government jobs (Exhibit 4).
| Industry | Number of Jobs (in thousands) | Percent of Nonmetropolitan Jobs |
|---|---|---|
| farm | 1,799 | 6.6 |
| agricultural services, forestry, fishing, and other | 479 | 1.8 |
| mining | 358 | 1.3 |
| construction | 1,529 | 5.6 |
| manufacturing | 4,419 | 16.3 |
| transportation and public utilities | 1,096 | 4.0 |
| wholesale trade | 855 | 3.1 |
| retail trade | 4,679 | 17.2 |
| finance, insurance, real estate | 1,264 | 4.7 |
| services | 6,325 | 23.3 |
| government | 4,345 | 16.0 |
| Total | 27,148 | 100.0 |
| Source: Economic Research Service, n.d. |
Wages in rural areas are lower than in urban areas (Exhibit 5), and rural employment opportunities are dominated by industries, such as the retail and services sectors, that pay lower wages. Rural employment in the manufacturing sector—which traditionally has higher paying jobs—has been decreasing since 1970, while rural employment in the services sector has been increasing (Mills, 1995).
| Earnings/Worker by Industry | Metropolitan Areas | Nonmetropolitan areas |
|---|---|---|
| farm | $16.49 | $14.39 |
| agricultural services, forestry, fishing, and other | $12.83 | $11.14 |
| mining | $35.52 | $29.88 |
| construction | $26.68 | $19.99 |
| manufacturing | $30.52 | $21.54 |
| transportation and public utilities | $30.46 | $26.80 |
| wholesale trade | $29.67 | $20.05 |
| retail trade | $12.50 | $10.09 |
| finance, insurance, real estate | $20.93 | $10.51 |
| services | $21.38 | $14.73 |
| federal government (civilian) | $28.64 | $24.50 |
| state or local government | $22.95 | $17.87 |
| Source: Mills, 1995. |
Because of the prevalence of low-wage jobs, a higher proportion of rural workers (12 percent) than urban workers (7 percent) earn minimum wage (Parker and Whitener, 1997). Those who are employed in rural areas are also more likely to be underemployed and less likely to be able to improve their employment circumstances over time.6 Overall, nonmetropolitan workers are (Findeis and Jensen, 1998):
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almost 40 percent less likely to move out of poor jobs than central city residents;
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20 percent less likely to find adequate jobs than 25 years ago; and
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more likely to be underemployed (among those who want full-time employment but are able to work only part-time, 80 percent are less likely to find adequate jobs now than 25 years ago).
As a result, (1) incomes in rural areas tend to be lower than in urban areas and (2) rural employed workers are more likely than urban employed workers to have incomes below poverty levels. Twenty-six percent of rural residents lived in households with incomes between one and two times the poverty line; for metropolitan residents, this figure was 18 percent (Nord, 1997). Workers in rural areas are more likely than their urban counterparts to be “near poor” at 200 percent of the poverty line: 39 percent versus 29 percent, respectively (Cook and Dagata, 1997).
Rural-urban earnings differentials are further exacerbated for women. In 1993, rural women made 75 percent of what urban women earned, 69 percent of what rural men earned, and 54 percent of what urban men earned (Rogers, 1997). Furthermore, rural women who left welfare earned less than urban women (Meyer and Cancian, 1998).
A Rural Economics Case StudyA recent study examined small town business patterns in Iowa and found that:
Source: Besser, 1998. |
Rural areas may be hard hit in a recession (Hamrick, 1997) because rural labor markets respond quickly to business cycles and appear to show signs of recession and expansion before urban labor markets. Some rural labor market groups, such as underemployed workers and discouraged workers (i.e., those who are not currently searching for jobs), respond less to business cycle movements (Findeis and Jensen, 1998). Therefore, an economic expansion is less likely to benefit underemployed and discouraged workers in rural areas than those in urban areas. A souring economy may also hurt rural workers more than urban workers because it creates more competition for existing jobs.
Recent figures show that economic conditions in rural areas have improved in recent years. Poverty rates in nonmetropolitan areas, which had begun to rise in 1989, began to slow their rates of increase or reverse that trend (Nord, 1996b). Per capita income has grown since 1990 for rural residents, closing the urban-rural income gap to about 25 percent (Angle and Nord, 1996). Employment rates continue to rise, reflecting modest and consistent economic growth (Nord, 1996a).
RURAL POVERTY
Rural poverty in America is more severe, more persistent, and often less visible than urban poverty. As a whole, the country’s rural population has lower incomes, lower employment levels, and higher poverty levels than urban and suburban America (Dudenhefer, 1993).7 In 1997, the poverty rate in nonmetropolitan counties was 16 percent, compared to 13 percent in metropolitan counties (U.S. Department of Commerce, 1998). Poverty levels in metropolitan areas are decreasing while they have stayed fairly constant in nonmetropolitan areas (U.S. Department of Commerce, 1998).8
| rural | urban | |
|---|---|---|
| average annual income | $32,299 | $41,072 |
| food | 12.8% | 11.9% |
| housing | 25.5% | 28.5% |
| utilities | 7.7% | 5.9% |
| transportation | 26.2% | 15.7% |
| health care | 6.2% | 4.4% |
| Source: Consumer Expenditure Survey, Bureau of Labor Statistics, 1997. |
The structure of poor families differs between rural and urban areas. As shown in Exhibit 6, although the percentage of poor married-couple families in rural areas has declined over time, it still is substantially higher than the percentage of poor married-couple families in urban areas. A matter of concern is that although the percentage of poor mother-only families in urban areas has declined, it has risen in rural areas. These changes in family structure account for a great deal of the increase in poverty among rural children (Lichter and Eggebeen, 1992).
| Year | Item | Urban | Rural |
|---|---|---|---|
| 1979 | married-couple families | 44.3 | 66.1 |
| mother-only families | 55.7 | 33.9 | |
| 1989 | married-couple families | 42.7 | 58.2 |
| mother-only families | 52.5 | 38.1 | |
| 1993 | married-couple families | 42.8 | 56.9 |
| mother-only families | 51.9 | 39.6 |
| Source: Rogers, 1997 (data are from the 1980 and 1990 decennial census and the March 1994 Current Population Survey). |
Nonmetropolitan counties have a higher percentage of children living in poverty than metropolitan counties. In 1990, the poverty rate for rural children was 23 percent, compared to 20 percent in urban counties.9 In 1997, among nonmetropolitan children, 23 percent of all children and 26 percent of children under age 6 were in poverty (U.S. Department of Commerce, 1998).
Most of the total rural population lives in two-parent families. Among the rural poor, half are in female-headed families with no husband present or are women living alone. The poverty rates are very high for children in female-headed households: in rural female-headed households in 1997, 55 percent of children were poor, and 66 percent of all children under age 6 were poor (U.S. Department of Commerce, 1998). The child poverty rate has declined in central cities and suburban areas over time, but has remained steady in rural areas (U.S. Department of Commerce, 1998).
Nonmetropolitan children are more likely to experience persistent, longer term poverty conditions (Sherman, 1992) because those who become poor are more likely than their metropolitan counterparts to continue in poverty. Those in female-headed families seem to be at even greater risk of persistent poverty. Among children in female-headed families who were ever poor between 1978 and 1982, 80 percent in nonmetropolitan areas stayed poor for three years or more, compared to 47 percent in metropolitan areas (Sherman, 1992). Persistent poverty has a strong impact on the cognitive development and behavior of children, and the duration of poverty is a strong predictor of school attainment and early patterns of employment (Duncan et al., 1998; Duncan et al., 1994; Caspi et al., 1998).
THE RURAL WELFARE POPULATION
Relatively little information is available about the rural welfare population because studies that describe the welfare population—both descriptively and in terms of outcomes—tend to provide (1) national (or statewide) statistics and trends or (2) findings from experiments usually conducted in metropolitan areas. The information that is available about rural welfare recipients is presented below.10
In 1997, 21 percent of the nation’s welfare recipients lived in rural areas. According to data from the 1997 Current Population Survey, from 1992 to 1997, the percentage of the country’s low-income population11 receiving public assistance declined from 16 to 11 percent; the percentage in nonmetropolitan areas declined from 12 to 8 percent (Hirschl, in press).
Rural welfare recipients have unique familial and labor force characteristics. Compared to urban participants, rural recipients are slightly more likely to be married and are more likely to work (or at least report work) than their central city counterparts (Rank and Hirschl, 1988; Nord et al., 1998; Porterfield and McBride, 1997). This may indicate the greater presence of lower-wage employment in rural areas. Welfare participation among eligible residents is lower in rural areas (Fitzgerald, 1995; O’Neill et al., 1987; Porterfield, 1998), probably because those who would be eligible for cash assistance have:
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less knowledge about welfare eligibility criteria (Rank and Hirschl, 1993);
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greater difficulties accessing services (Hirschl and Rank, 1991); and
- a greater sense of stigma attached to program participation (Duncan, 1996; Osgood, 1977; Rank and Hirschl, 1988).
THE CHALLENGES OF RURAL POVERTYIn September 1997, The Detroit News ran a series of articles on “Denise,” a welfare recipient with three children living in rural Sunfield, Michigan. Denise lived in a trailer next to her parents’ burned-out farmhouse, 21½ miles from the village center. The closest neighbor was a half mile down a dirt road. That previous summer, Denise’s 1991 Plymouth Acclaim was destroyed in an accident. Up until that point Denise had been with Michigan’s Work First program and had a small business cleaning houses. After the accident, Denise was “trailer trapped and increasingly desperate.” She lost her housekeeping jobs and telephone and missed her appointments with Michigan’s human services staff. For a while, she tried to go into Sunfield on a old 10-speed bicycle and to call a local woman who would ferry her around for a few dollars. In Denise’s case, living in a remote rural area, coupled with the loss of her car, resulted in a downward spiral away from employment and participation in the Work First program. Denise wanted to be a medical assistant, but there were no educational programs or jobs in this field in Sunfield or nearby. Denise’s housecleaning vocation also proved difficult because of the low population density around where she lived. Unable to meet the requirements of Work First, Denise lost public assistance and food stamp benefits for a period of time. Source: Hodges, 1998. |
Spells on public assistance are shorter in rural areas than in urban areas. As shown in Exhibit 7, data comparing rural and urban families that received welfare during the 1992-93 period show that rural families had a shorter duration on welfare, a higher percentage had left welfare after two years, and a lower percentage remained on welfare after three years.12 Also, female heads of households on welfare in rural areas were, compared to their urban counterparts, more likely to have finished high school, to be or have been married, to have been currently employed, and to have been working full-time (Porterfield, 1998).
| Item | Rural | Urban |
|---|---|---|
| spell duration (median) | 12.2 months | 15.1 months |
| families with spells of 4 or fewer months | 20 percent | 17 percent |
| families that had left welfare after 2 years | 70 percent | 64 percent |
| families on welfare after 3 years | 20 percent | 26 percent |
| Source: Porterfield, 1998, using data from the 1992 and 1993 panels of the Survey of Income and Program Participation. |
One interesting feature of the welfare system particularly affects rural low-income families. An important principle behind welfare is that public assistance payments can help to alleviate the effects of poverty. In rural areas, the dollar amount received by welfare families is significantly less than the dollar amount received by urban families, so the rural population has not received as beneficial a subsidy as the urban population (Jensen, 1988). It seems that the disparity is not because of some bias that favors urban areas, but because states with large rural populations also tend to be states that have low per capita income levels (Nord, 1998).
SUMMARY
The population in rural areas is different from the population in urban areas: it is older, more racially homogeneous, and has less education. Farming-related employment in rural areas has decreased, and jobs in the service sector have increased. Wages in rural areas are lower than in urban areas, and rural employment opportunities are dominated by industries that pay lower wages.
As a result, incomes in rural areas tend to be lower than in urban areas, and rural employed workers are more likely than urban employed workers to have incomes below the poverty level. Rural poverty is more severe, more persistent, and often less visible than urban poverty.
Compared to urban welfare recipients, those in rural areas are more likely to be married and more likely to work. The rate of receiving cash assistance in rural areas is lower than in urban areas, and spells on public assistance are shorter.
2 Statistical information in this document comes from a wide array of sources, some of which distinguish between “rural” and “nonmetropolitan,” according to different definitions and constructs established by the Census Bureau, the U.S. Office of Management and Budget, and the U.S. Department of Agriculture. Because this document synthesizes information from many studies, we use the terms interchangably, following the practices established by others who have similarly synthesized information (e.g., Castle, 1995). (back)
3 The concentration of the elderly population in nonmetropolitan areas varies by region: most nonmetropolitan counties with an elderly population of 20 percent or more are clustered in the Great Plains, specifically North Dakota, South Dakota, and Nebraska, which have experienced a large outmigration of their younger age groups (Fuguitt, 1995). (back)
4 The concentration of racial groups varies by region: in 1990, 91 percent of all nonmetropolitan African Americans lived in the South, and Hispanics were concentrated in the Southwest and the West (Fuguitt, 1995). Because people who identify themselves as Hispanic may be of any race, this category may overlap with other categories. (back)
5 By 1994, unmarried mothers accounted for 31 percent of all rural births, compared to 33 percent of all urban births (Frenzen and Butler, 1997). (back)
6 The fact that rural areas (in comparison with urban areas) have more residents who are working, but still in poverty, is probably due to some combination of lower educational levels and lower-paying jobs in rural areas. (back)
7 Across the United States, there are dramatic differences in poverty levels in rural areas (Shaw, 1997). (back)
8 There is a great diversity among regions, however, with rural poverty disproportionately found in the South, the “core” of the Appalachian region, the border counties of the lower Rio Grande Valley, and on American Indian reservations. (back)
9 Data from the 1997 Current Population Survey (the most recent one available) show that the percentages of children living in poverty in rural areas, suburban areas, and central cities were, respectively, 23, 14, and 30 percent. (back)
10 Almost all the information in this section concerns the rural AFDC population. Other than data about decreases in caseloads, very little analysis has yet to emerge on the TANF population. There is reason to believe that characteristics of the current TANF population are quite similar to those of the recent AFDC population. (back)
11 “Low-income population” is defined as those with incomes below 125 percent of the poverty level, which is a rough gauge of the population in need of public assistance. (back)
12 These results are very comparable to older data from a single state (Wisconsin). After 3 years, 79 percent of rural recipients had left welfare, compared to 54 percent in urban areas and 67 percent in mixed urban/rural areas (Rank and Hirschl, 1988). They are also comparable to findings from 1984 and 1985 Survey of Income and Program Participation (SIPP) panels (Fitzgerald, 1995). (back)
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