In the United States, low-income people are not evenly distributed across the rural-urban landscape. Does this phenomenon partly reflect that people who "choose" to live in rural areas have unmeasured attributes related to poverty? To address this question, I use data from nine waves of the Panel Study of Income Dynamics (PSID) to track economic well-being and rural/urban residential choice among a sample of 6,461 householders. A series of multivariate regression models are estimated in which the dependent variable is a householder's income to need and explanatory variables are individual attributes and place-level factors, including whether the county of residence is nonmetropolitan (nonmetro). First I estimate an ordinary least squares (OLS) model which excludes educational attainment variables. I then estimate an OLS model with controls for education. Finally, I estimate an individual fixed-effects regression model that controls for observed education and unobserved income capacity. I find that the effect on income to need of living in a nonmetro area is reduced substantially as more stringent controls for individual heterogeneity are implemented. Specifically, the first regression shows that nonmetro householders have income to need that is 26 percent lower than metro householders. The fixed-effects specification, by contrast, indicates a rural-urban gap in economic well-being of only 7 percent. Taken together, results suggest that one explanation for the higher incidence of poverty in rural than urban areas is that people with personal attributes associated with having low income tend to sort themselves into rural places.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Oregon State University, Rural Poverty Research Center (RPRC) in its series Working Papers with number
18904.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Glaeser, Edward L & Mare, David C, 2001.
"Cities and Skills,"
Journal of Labor Economics,
University of Chicago Press, vol. 19(2), pages 316-42, April.
[Downloadable!] (restricted)
Other versions:
Glaeser, E.L. & Mare, D.C., 1994.
"Cities and Skills,"
Papers
e-94-11, Stanford - Hoover Institution.
Edward L. Glaeser & David C. Mare, 1994.
"Cities and Skills,"
NBER Working Papers
4728, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)