Dean Jolliffe
Rural Development Research Report Number 100,
March 2005
During the 1990s, America experienced unprecedented economic
growth and a large decline in the national poverty rate.
Between 1993 and 2000, real GDP (gross domestic product
adjusted for inflation) grew by 4 percent annually, which
was significantly greater than the 2.7-percent average
growth rate over the previous two decades. During this
same time period, the poverty rate declined from a decade
high of 17.2 percent in 1993 to a low of 11.3 percent
in 2000. The new century ushered in a brief recession,
thereby halting the Nation’s economic expansion
and leading to an increase in poverty. While the recession
officially ended in late 2001, the poverty rate has continued
to increase, with the most recent estimates indicating
that just over 12 percent of the American population was
poor in 2002.
The rate of poverty is not only an important social indicator
of the well-being of America’s poor, but it is also
a useful tool in shaping Federal policies and targeting
program benefits to those most in need. Poverty rates,
however, are not distributed equally across the United
States. Thus, strategies to reduce poverty must consider
the differences in the nature of poverty between nonmetropolitan
(nonmetro) and metropolitan (metro) areas of the country.
While metro and nonmetro areas have shared similar upward
and downward trends in poverty rates over time, the nonmetro
rate has exceeded the metro rate every year since poverty
was first officially measured in the 1960s. In the 1980s,
the difference between the nonmetro and metro poverty
rates was 4.4 percentage points. While this gap shrank
during the 1990s, poverty rates in nonmetro areas still
averaged 2.6 percentage points higher than rates in metro
areas.
USDA’s Economic Research Service (ERS) analyzes
the ongoing changes in rural areas and assesses Federal,
State, and local strategies to enhance economic opportunity
and quality of life for rural Americans. This publication
provides the most recent information on poverty trends
and demographic characteristics of the rural poor for
use in developing policies and programs to assist rural
people and their communities.
Dimensions of poverty
In 2002, 14.2 percent of the nonmetro population, or
7.5 million people, were poor, compared with 11.6 percent
of the metro population. This difference has persisted
through time, and it is also evident when poverty is analyzed
by race, ethnicity, age, and family structure.
Race and ethnicity strongly correlated with rural poverty
According to the 2000 Census, racial and ethnic minorities
constitute 17 percent of the nonmetro population, with
nonmetro minority populations growing in all 50 States.
Overall U.S. poverty rates are higher for minorities than
for non-Hispanic Whites. This racial disparity is even
more marked when considering rural poverty rates and other
dimensions of well-being, such as education and depth
of poverty.
- More than one out of every four nonmetro Hispanics,
Blacks, and Native Americans live in poverty.
- The nonmetro poverty rates in 2002 for non-Hispanic
Blacks (33 percent) and Native Americans (35 percent)
were more than three times the nonmetro poverty rate
for
non-Hispanic Whites (11 percent). The rate for Hispanics
(27 percent) was more than twice as high.
- Sixty-eight percent of nonmetro Hispanics who are
poor have less than a high school education, compared
with 40 percent of nonmetro non-Hispanic Whites who
are poor.
- Fifty-two percent of nonmetro Native Americans who
are poor have incomes that are less than half of the
poverty line.
- Poverty rates for non-Hispanic Blacks and Native
Americans are more than 10 percentage points higher
in nonmetro areas than in metro areas, the largest gap
among minority population groups.
Family composition and child poverty rates in rural
America
Family
structure has a significant bearing on poverty. Families
headed by two adults are likely to have more sources of
income than single-adult families with children and are
therefore less likely to be poor. Further, families with
two adults are more able to share the burden of child
care, whereas a single adult may have to pay for child
care or limit working hours.
- Over 75 percent of all nonmetro families are headed
by a married couple. About 15 percent are headed by
a single female.
- People living in families headed by a married couple
have the lowest rate of nonmetro poverty, at 7.2 percent.
- In nonmetro areas, 16.6 percent of the people in
male-headed, single-adult families are poor, while the
poverty rate is 37.1 percent for members of female-headed
families. The higher poverty rate for female-headed
families is attributed to lower labor force participation
rates, shorter average work weeks, and lower earnings.
- The poverty rate for people living in female-headed
families is 10 percentage points greater in nonmetro
areas than in metro areas.
Family structure also affects child poverty rates. Families
headed by one adult, by definition, contain disproportionately
more children than similar-sized families headed by two
adults. Also, single-parent families typically have fewer
income earners and a greater chance of being poor.
- Approximately 2.6 million children living in nonmetro
areas are poor, constituting 35 percent of the nonmetro
poverty population.
- In 2002, one out of every five children living in
nonmetro areas was poor.
- Since 1985, the child poverty rate in nonmetro areas
has never fallen below 18 percent.
- Almost half (46 percent) of all non-Hispanic Black
children living in nonmetro areas are poor; 43 percent
of nonmetro Native American children are poor.
Regional characteristics of poverty
The rural South has the highest and most persistent
poverty rates
A particularly revealing dimension of poverty is time
spent living in poverty. ERS has defined counties as being
persistently poor if 20 percent or more of their populations
were poor over the last 30 years (measured by the 1970,
1980, 1990, and 2000
decennial censuses). For more information on persistent
poverty and other county typologies, see www.ers.usda.gov/briefing/Rurality/Typology.
- The United States has 386 persistent poverty counties,
home to 4 percent of the U.S. population.
- Nonmetro counties make up the large majority (340
of 386) of persistent poverty counties. Fourteen percent
of the Nation’s nonmetro population live in persistent
poverty counties.
- Among nonmetro persistent poverty counties, 280 are
in the South, and 60 are in the West and Midwest. None
are in the Northeast.
- The nonmetro South, with over 40 percent of the U.S.
nonmetro population, has the greatest prevalence of
both poverty and persistent poverty. More than one in
six persons in the region are poor and more than one
in four live in persistent poverty counties.
Poverty is highest in the most rural areas
Nonmetro areas are commonly mischaracterized as being
sparsely populated small towns with open countryside.
Indeed, many nonmetro counties fit this description, but
others contain relatively large urban areas. ERS rural-urban
continuum codes account for the differences among nonmetro
areas and categorize nonmetro counties by degree of urbanization
and adjacency to metro areas.
- The poverty rate is the highest in the completely
rural counties (not adjacent to metro counties), with
16.8 percent of the population poor. The poverty rate
in the largest metro areas is the lowest, with 11.5
percent of the population poor.
- Counties with low employment rates are disproportionately
located in the most rural areas. ERS defines a county
as having a low employment level if less than 65 percent
of the adult (age 21-64) population is employed. In
the most urban of areas, 6 percent of the population
reside in low-employment counties. In the most rural
areas, 32 percent of the population reside in low-employment
counties.
- Persistent poverty and degree of rurality are also
linked. Nearly 28 percent of the people living in completely
rural counties live in persistent poverty counties
In contrast, 7.5 percent of the people living in the
most urban nonmetro areas live in persistent poverty
counties.
Selected poverty rates and
economic indicators, 2002 |
|
Characteristic |
Nonmetro |
Metro |
|
Median household income (dollars)
Poverty population (millions)
Prevalence of poverty (percent)
Poverty by region of U.S. (percent)
Northeast
Midwest
South
West
Poverty rates for selected groups (percent)
Non-Hispanic Blacks
Non-Hispanic Whites
Hispanics
Children (younger than age 18)
Elderly (age 65 and older)
Nonelderly adults (age 18-65)
Educational attainment of poor adults (percent)
Less than high school education
No more than high school education
More than high school education
Income levels of poor adults (percent)
Less than half the poverty line
Between half and 75 percent of the poverty line
Greater than 75 percent of the poverty line |
34,654
7.5
14.2
10.7
10.7
17.5
14.3
33.2
11.0
26.7
19.8
11.9
12.4
44.5
32.8
22.8
36.4
28.2
35.4
|
|
45,257
27.1
11.6
10.9
10.1
12.7
12.1
22.7
7.2
21.4
16.0
10.0
10.2
40.0
30.7
29.3
41.9
25.5
32.6
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Definitions
and sources |
Who Is Poor?
Any individual with income less than that deemed
sufficient to purchase basic needs of food, shelter,
clothing, and other essential goods and services
is classified as poor. The income necessary to purchase
these basic needs varies by the size and composition
of the household. Official poverty lines or thresholds
are set by the Office of Management and Budget (OMB).
The 2002 poverty line for an individual under age
65 is $9,359. For a three-person family with one
adult and two children, it is $14,494. For a five-person
family with two adults and three children, the poverty
line is $21,469. Income includes cash income (pretax
income and cash welfare assistance), but excludes
in-kind welfare assistance, such as food stamps
and Medicaid. Poverty lines are adjusted annually
to correct for inflation. Comparisons of metro–nonmetro
poverty rates pose some measurement difficulties.
For example, U.S. poverty rates do not adjust for
differences in cost of living across areas. If,
as assumed, basic needs cost less in nonmetro areas,
then the nonmetro poverty rate would be lower. However,
some costs—such as transportation to work—are
likely to be higher in nonmetro areas. For more
on the definition of poverty and a full listing
of poverty thresholds, see http://www.census.gov/hhes/www/poverty.html.
What Is Rural?
In this publication, the terms “rural”
and “urban” are used synonymously with
nonmetropolitan and metropolitan. Estimates from
the Current Population Survey (CPS) identify metro
and nonmetro areas according to OMB’s 1993
designation. Other estimates, from the 2000 Census,
are based on OMB’s 2003 classification, which
reflects not only a decade of urban growth and restructuring
but also modification of the rules governing metro
and nonmetro status.
Metro areas were previously defined to include
central counties with one or more cities of at least
50,000 residents or with an urbanized area of 50,000
or more and total area population of at least 100,000.
Under the new system, metro areas are defined for
all urbanized areas regardless of total area population.
Outlying counties are also classified as metro if
they are economically tied to the central counties,
as measured by share of workers commuting on a daily
basis to the central counties. For more information
on this topic, go the ERS
briefing room on measuring rurality.
More About Poverty Research at ERS . .
.
For more information on poverty in rural America,
go to the ERS
website’s briefing room on rural income, poverty
and welfare. For general information about rural
America,visit the Rural
Emphasis page. ERS also provides more in-depth
analysis of rural poverty, including research on
the effect of changing policy and demographic patterns
on rural poverty. In particular, see:
- Comparisons
of Metropolitan-Nonmetropolitan Poverty During
the 1990s. While the greater prevalence
of poverty in nonmetro areas relative to metro
areas is well documented, comparisons of the depth
and severity of poverty in the two areas have
been lacking. This report examines metro-nonmetro
differences in U.S. poverty rates, using data
from CPS (1991-2000) and poverty measures that
are sensitive to income distribution.
- Rural
Welfare Reform: Lessons Learned.
The transition from welfare to work is proving
more difficult in rural than in urban areas, especially
in remote, sparsely populated areas where job
opportunities are few. This article addresses
two broad questions: What have we learned from
empirical studies about rural-urban differences
in welfare reform effects on program participation,
employment, and poverty? Do rural and urban low-income
families have different needs that might be reflected
in the design of policies meant to provide assistance?
- Anatomy
of Nonmetro High-Poverty Areas. This
article identifies a typology of high-poverty
counties that reflects racial/ethnic and regional
differences in major characteristics, such as
education, employment, family structure, incidence
of disability. Of the more than 400 nonmetro counties
classified as high-poverty counties in 2000, three-fourths
reflect the low income of racial and ethnic minorities
and are classified as Black, Native American,
or Hispanic high-poverty counties.
Data Sources
This report draws on the research of ERS’s
Food and Rural Economics Division. Data used in
this analysis come primarily from the 2000 Census
and several years (1991 to 2003) of the Annual Social
and Economic Supplement to the Current Population
Survey.
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