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Are The Effects Of The Macroeconomy And Social Policies On Poverty Different In Rural America?

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  • Gundersen, Craig
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    Abstract

    The macroeconomy and social policies can have substantial influences on poverty in the United States. In this paper, I investigate whether these influences differ across metro and nonmetro areas. To do so, using a 16-year panel of state-level data, I estimate state and year fixed effects models separately for metro and nonmetro areas to see if the effects of the macroeconomy and social policies differ between these two areas. These models are estimated using two measures� the poverty rate and the squared poverty gap � and by family type. I find that cyclical forces have a much stronger effect on the poverty rate in nonmetro areas in comparison to metro areas but the effects are similar for the squared poverty gap; wage growth has a pronounced effect on poverty in metro areas but no effect in nonmetro areas; and state-level social policies have slightly larger effects in nonmetro areas but the effects are small.

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    File URL: http://purl.umn.edu/18909
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    Bibliographic Info

    Paper provided by Oregon State University, Rural Poverty Research Center (RPRC) in its series Working Papers with number 18909.

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    Date of creation: 2005
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    Handle: RePEc:ags:osruwp:18909

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    Postal: 200 Mumford Hall, University of Missouri, Columbia, Missouri 65211
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    Web page: http://www.rprconline.org/index.htm
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    Related research

    Keywords: Food Security and Poverty;

    References

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    1. John M. Ulimwengu & David S. Kraybill, 2004. "Poverty over Time and Location: An Examination of Metro-Nonmetro Differences," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(5), pages 1282-1288.
    2. Jamie S. Partridge & Mark D. Partridge & Dan S. Rickman, 1998. "State Patterns In Family Income Inequality," Contemporary Economic Policy, Western Economic Association International, vol. 16(3), pages 277-294, 07.
    3. Ann Huff Stevens, 1995. "Climbing Out of Poverty, Falling Back In: Measuring the Persistence of Poverty over Multiple Spells," NBER Working Papers 5390, National Bureau of Economic Research, Inc.
    4. Neumark, David & Wascher, William, 2001. "Using The EITC to Help Poor Families: New Evidence and a Comparison with the Minimum Wage," National Tax Journal, National Tax Association, vol. 54(n. 2), pages 281-318, June.
    5. Gottschalk, Peter & Danziger, Sheldon, 1985. "A Framework for Evaluating the Effects of Economic Growth and Transfers on Poverty," American Economic Review, American Economic Association, vol. 75(1), pages 153-61, March.
    6. Rebecca M. Blank, 1997. "What Causes Public Assistance Caseloads to Grow?," NBER Working Papers 6343, National Bureau of Economic Research, Inc.
    7. Dean Jolliffe, 2003. "On the Relative Well-Being of the Nonmetropolitan Poor: An Examination of Alternate Definitions of Poverty during the 1990s," Southern Economic Journal, Southern Economic Association, vol. 70(2), pages 295-311, October.
    8. Bruce D. Meyer & Dan T. Rosenbaum, 1999. "Making Single Mothers Work: Recent Tax and Welfare Policy and its Effects," JCPR Working Papers 152, Northwestern University/University of Chicago Joint Center for Poverty Research.
    9. Weber, Bruce A. & Jensen, Leif, 2004. "Poverty And Place: A Critical Review Of Rural Poverty Literature," Working Papers 18913, Oregon State University, Rural Poverty Research Center (RPRC).
    10. Davis, Elizabeth E. & Connolly, Laura S. & Weber, Bruce A., 2003. "Local Labor Market Conditions and the Jobless Poor: How Much Does Local Job Growth Help in Rural Areas?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(03), December.
    11. David M. Cutler & Lawrence F. Katz, 1991. "Macroeconomic Performance and the Disadvantaged," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(2), pages 1-74.
    12. David Neumark & William L. Wascher, 2008. "Minimum Wages," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262141027, December.
    13. Hanratty, Maria J & Blank, Rebecca M, 1992. "Down and Out in North America: Recent Trends in Poverty Rates in the United States and Canada," The Quarterly Journal of Economics, MIT Press, vol. 107(1), pages 233-54, February.
    14. Meyer, Bruce D. & Rosenbaum, Dan T., 2000. "Making Single Mothers Work: Recent Tax and Welfare Policy and its Effects," National Tax Journal, National Tax Association, vol. 53(n. 4), pages 1027-62, December.
    15. Bruce Weber & Mark Edwards & Greg Duncan, 2004. "Single Mother Work and Poverty under Welfare Reform: Are Policy Impacts Different in Rural Areas?," Eastern Economic Journal, Eastern Economic Association, vol. 30(1), pages 31-51, Winter.
    16. Rebecca M. Blank & David Card, 1993. "Poverty, Income Distribution, and Growth: Are They Still Connected," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(2), pages 285-340.
    17. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-66, May.
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