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Why Is U.S. Poverty Higher in Nonmetropolitan than in Metropolitan Areas?

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  • MONICA FISHER

Abstract

In the U.S., people are more likely to be poor if they live in a nonmetropolitan (nonmetro) than in a metropolitan (metro) area. A common explanation for this phenomenon is that nonmetro places offer relatively few economic and social opportunities. This article explores another plausible explanation, asking if the disproportionate poverty in nonmetro areas "partly" reflects attitudes of people with personal attributes related to poverty: they may be attracted to nonmetro places or otherwise reluctant (or unable) to leave them. To test this hypothesis, data from nine waves of the Panel Study of Income Dynamics (PSID) are used to track economic well-being and nonmetro-metro residential choice among a sample of 2,007 low-income householders. A series of multivariate regression models are estimated in which the dependent variable is a householder's income to need (adjusted for spatial cost-of-housing differences), and regressors are individual attributes, a binary variable for nonmetro residence, and state fixed-effects. Regression results show that controlling for householder educational attainment reduces the negative association between nonmetro residence and income to need; but controlling for unobserved, time-invariant heterogeneity via individual fixed-effects increases the magnitude of this negative association. Study findings thus appear to indicate that enduring nonmetro poverty is explained both by a sorting of low human capital individuals into nonmetro areas and by reduced economic opportunities in nonmetro compared to metro places. Copyright 2007 Blackwell Publishing.

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Bibliographic Info

Article provided by Gatton College of Business and Economics, University of Kentucky in its journal Growth and Change.

Volume (Year): 38 (2007)
Issue (Month): 1 ()
Pages: 56-76

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Handle: RePEc:bla:growch:v:38:y:2007:i:1:p:56-76

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0017-4815

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Cited by:
  1. Marre, Alexander W., 2009. "Rural Out-Migration, Income, and Poverty: Are Those Who Move Truly Better Off?," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49346, Agricultural and Applied Economics Association.
  2. Elizabeth Whitaker & Janet Bokemeiner & Scott Loveridge, 2013. "Interactional Associations of Gender on Savings Behavior: Showing Gender’s Continued Influence on Economic Action," Journal of Family and Economic Issues, Springer, vol. 34(1), pages 105-119, March.
  3. Sooriyakumar Krishnapillai & Henry Kinnucan, 2012. "The effects of automobile production and local government expenditure on poverty in alabama," Economics Bulletin, AccessEcon, vol. 32(3), pages 2136-2145.
  4. Ebru Çaglayan & Naime Irem Kosan & Melek Astar, 2012. "An Empirical Analysis of the Determinants of Household Poverty in Turkey," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 2(1), pages 181-191, March.

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