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A new micro view of the U.S. rural economy


  • Mark Henry
  • Mark Drabenstott


Rural areas are thought to have two salient features, remoteness and small scale, that tend to inhibit economic growth. These features have explained at least partially why economic growth in the nation's rural areas has often trailed that in metropolitan areas. However, the rural economic turnaround in the 1990s, while not uniform, suggests that some rural communities may have found ways of overcoming their remoteness and small scale. Put simply, some rural areas appear to have an advantage over others in terms of economic growth rates.> How have rural economies been performing and why have some been able to perform better than others? Accurate answers to these questions are hard to come by. Typically, the performance of the nation's rural counties is compared with the performance of metropolitan counties, and then a summary comparison is drawn. But such an aggregate approach has drawbacks. One conceptual weakness is that rural places usually compete for economic activity with the metropolitan area at the center of their economic sphere, not with all metropolitan areas. In short, the usual macro view of the rural economy may overlook critical micro information and linkages.> Henry and Drabenstott use a new micro-region approach to measure and explain rural economic performance. They measure rural economic performance by assessing performance within a framework of multicounty economic regions, each of which has a metropolitan center and a surrounding area. Their analysis reveals that rural counties in a surprising number of micro-regions throughout the nation are adding jobs at a faster rate than their neighboring metropolitan area. The authors further consider the factors that appear to explain why some rural places have been enjoying solid job growth, and they discuss the implications of these micro-level findings for public and private decisionmakers.

Suggested Citation

  • Mark Henry & Mark Drabenstott, 1996. "A new micro view of the U.S. rural economy," Economic Review, Federal Reserve Bank of Kansas City, issue Q II, pages 53-70.
  • Handle: RePEc:fip:fedker:y:1996:i:qii:p:53-70:n:v.81no.2

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    References listed on IDEAS

    1. Barkley, David L. & Henry, Mark S. & Bao, Shuming, 1994. "Metropolitan Growth: Boone or Bane to Nearby Rural Areas?," Choices, Agricultural and Applied Economics Association, vol. 9(4).
    2. David, Paul A. & Rosenbloom, Joshua L., 1990. "Marshallian factor market externalities and the dynamics of industrial localization," Journal of Urban Economics, Elsevier, vol. 28(3), pages 349-370, November.
    3. hUallachain, Breandan O & Satterthwaite, Mark A., 1992. "Sectoral growth patterns at the metropolitan level: An evaluation of economic development incentives," Journal of Urban Economics, Elsevier, vol. 31(1), pages 25-58, January.
    4. McDonald, John F., 1989. "On the estimation of localization economies," Economics Letters, Elsevier, vol. 29(3), pages 275-277.
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    Cited by:

    1. Joanna Wiśniewska, 2014. "Konkurencyjność przedsiębiorstw z obszarów wiejskich w województwie wielkopolskim," Gospodarka Narodowa, Warsaw School of Economics, issue 3, pages 81-110.
    2. Henderson, Jason R. & McDaniel, Kendall, 2000. "The Impact Of Scenic Amenities On Rural Employment Growth," 2000 Annual meeting, July 30-August 2, Tampa, FL 21725, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Romana Khan & Peter F. Orazem & Daniel M. Otto, 2001. "Deriving Empirical Definitions of Spatial Labor Markets: The Roles of Competing Versus Complementary Growth," Journal of Regional Science, Wiley Blackwell, vol. 41(4), pages 735-756.
    4. Hill, Lee Edwin, 1999. "The impact of industry clustering on Iowa manufacturing wages, 1986-1994," ISU General Staff Papers 1999010108000017642, Iowa State University, Department of Economics.
    5. Wojan, Timothy R. & Lackey, Steven Brent, 2000. "Manufacturing Specialization in the Southeast: Rural Necessity, Rural Possibility, or Rural Vestige?," The Review of Regional Studies, Southern Regional Science Association, vol. 30(2), pages 167-187, Fall.
    6. Rupasingha, Anil & Goetz, Stephan J., 2007. "Social and political forces as determinants of poverty: A spatial analysis," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 36(4), pages 650-671, August.
    7. Barkley, David L. & Kim, Yunsoo & Henry, Mark S., 2001. "Do Manufacturing Plants Cluster Across Rural Areas? Evidence From A Probabilistic Modeling Approach," REDRL Research Reports 18796, Clemson University, Regional Economic Development Research Laboratory (REDRL).

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    Rural areas ; Rural development;


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