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Government transfer payments comprise a large share of personal income for both nonmetro and metro residents. Transfer payments to individuals accounted for 24.9 percent of total nonmetro personal income and 15.2 percent of metro personal income, in 2009. Of the $2.08 trillion in Federal, State, and local government personal transfer payments to individuals in 2009, $393 billion went to nonmetro residents and $1.68 trillion went to metro residents. On a per capita basis, nonmetro residents received more transfers than metro residents, $7,829 vs. $6,554.
Unemployment insurance compensation and food stamp payments have increased sharply since the beginning of the recession in 2007. Nonmetro unemployment compensation payments increased by 260.6 percent between 2007 and 2009, compared with 280 percent in metro areas. Nonmetro Supplemental Nutrition Assistance Program (SNAP) payments jumped by 63.8 percent in the same period while metro payments increased by 72.3 percent.
Nonmetro per capita transfer payments have been rising faster than payments in metro areas since 1978. The majority of this increase is due to the rising cost of government programs that provide medical benefits, such as Medicare and Medicaid. Nonmetro areas have an older population and a higher proportion of persons with disabilities than metro areas and thus depend more on transfer payments for retirement and medical costs.
See the report, Health Status and Health
Care Access of Farm and Rural Populations for
more information.
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Medical benefits are the single largest transfer payment category in both metro and nonmetro areas. In 1978 medical benefits accounted for 18.9 percent of all nonmetro transfer payments (the second largest category) and by 2009 these had risen to 41.3 percent (the largest category) of all nonmetro transfer payments. Similarly, in metro areas, medical benefits increased from 22.7 percent of all transfer payment in 1978 to 42.0 percent in 2009. Overall, between 1978 and 2009, nonmetro transfer payments for medical benefits increased 559 percent compared with 473 percent in metro areas. Some of the increase in metro and nonmetro transfer payments for medical benefits can be attributed to legislation expanding health insurance to children in working families through Medicaid and the Children's Health Insurance Program (CHIP). However, the rising cost of health care, which has far outpaced the overall rate of inflation, is a major source of this increase.
Transfer payments for retirement and disability insurance are also increasing, but in contrast to medical benefits, have been declining as a proportion of total transfer payments. In 1978 nonmetro retirement and disability payment accounted for 51.7 percent of total transfers; by 2009 percentage this had fallen to 35.2 percent. Nonmetro retirement and disability transfer payments increased by 105.6 percent over this period. Metro retirement and disability payments fell from 46.1 percent of total transfers in 1978 to 32.2 percent in 2009 and increased by 116.5 percent over this period. Barring changes in program eligibility and support, per capita transfer payments in rural America are likely to increase due to the aging of the baby boom population, many of whom are expected to move to rural areas as they retire. For more information,
see the Amber Waves article, Baby
Boom Migration Tilts Towards Rural America.
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