Persistent Pockets Of Extreme American Poverty: People Or Place Based?

Over the past four decades almost 400 U.S. counties have persistently had poverty rates in excess of 20 percent. These counties are generally characterized by weak economies and disadvantaged populations. This raises the hotly debated question of whether poverty-reducing policies should be directed more at helping people or helping the places where they reside. Using a variety of regression approaches, including geographically weighted regression analysis, we consistently find that local job growth especially reduces poverty in persistent-poverty counties. We also find that persistent-poverty counties do not respond more sluggishly to exogenous shocks, nor do they experience more adverse spillover effects from their neighboring counties. Finally, we identify some key geographic differences in the poverty determining mechanism among persistent-poverty clusters. Taken together, these results indicate that place-based economic development has a potential role for reducing poverty in these counties.