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

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.