Poverty rates vary considerably over regions, as do the demographic characteristics of the poor, but why the extent of poverty varies as much as it does across different regions of the country is not fully understood. This is an unfortunate gap in our knowledge, since it is difficult to analyze how recent changes in federal anti-poverty policy will affect the regional distribution of poverty without a better understanding of current regional differences in the poverty rate.> The main goal of this article is to shed some light on why poverty rates vary as much as they do in different areas. The analysis shows that much of the regional variation in poverty rates can be accounted for by differences across regions in the distribution of potential family earnings: what families could be expected to earn if all their adult members worked full-time, relative to the poverty threshold for the family. Other factors, such as unemployment and whether the family recently immigrated to the United States, also are important in determining the poverty status of individual families, but play a somewhat smaller role than earnings capacity in explaining regional differences in poverty rates.
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