WP 05-08: The Tax Code as Social Policy in Rural America
Alan Berube. December 2005

This concept paper, commissioned by the Rural Policy Research Institute, describes the increasingly fundamental role that the federal tax code plays in providing support to rural communities, especially their lower-income residents. It charts the overall growth of social policy expenditures through the tax code, and explains why these expenditures may be particularly meaningful for both families and places in rural America, focusing on the value of selected federal tax credits in two states relative to agricultural subsidies. It concludes by analyzing the various opportunities and challenges that would accompany a more concerted effort to highlight the tax code’s importance as a tool for enhancing economic and social well-being in rural places.

WP 05-07: Beyond Gateway Cities: Economic Restructuring and Poverty Among Mexican Immigrant Families and Children
Martha L. Crowley, Daniel T. Lichter, and Zhenchao Qian June 2005.

Our main objective is to better understand how new residential patterns have reshaped patterns of poverty among America’s growing Mexican-origin population. We use data from the Integrated Public Use Microdata Samples (IPUMS) to document recent changes in poverty rates among native-born and foreign-born Mexicans living in the Southwest and in new regions where many Mexican families have resettled. Our analysis focuses on how changing patterns of employment (e.g., in construction and food processing industries) have altered the risk of poverty among Mexican families and children. We demonstrate that the Mexican population dispersed widely throughout the United States during the 1990s. Perhaps surprisingly, Mexican workers, especially new immigrants, had much lower rates of poverty in the new destination regions and rural areas than their counterparts that remained in traditional areas of population concentration – the Southwest. As we show in this study, the dispersion of America’s Mexican native-born and immigrant populations raises questions and hopes about their economic and political incorporation into American society.

WP 05-06: Are the Effects of the Macroeconomy and Social Policies on Poverty Different in Rural America?
Craig Gunderson. June 2005.

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.

WP 05-05: The Impact of the 1990s Economic Boom on Less-Educated Workers in Rural America
Liz Davis and Stacie Bosley. June 2005.

This article uses National Longitudinal Survey of Youth (NLSY79) data to investigate the impact of local labor market conditions on the employment and earnings of rural noncollege-educated workers. The results suggest that local economic conditions in the late 1990s did have a positive impact on wages, and the effect is larger for workers with no more than a high school degree compared to their college-educated counterparts. Further, there is evidence of a difference between rural and urban labor markets, suggesting that the 1990s boom helped urban less-educated workers but not those in rural areas. The rural/urban difference is most apparent for male workers.

WP 05-04: Why is U.S. Poverty Higher in Nonmetropolitan than Metropolitan Areas? Evidence from the Panel Study of Income Dynamics
Monica Fisher. May 2005.

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.

WP 05-03: Men Without Sawmills: Masculinity, Rural Poverty, and Family Stability
Jennifer Sherman. May 2005.

Using ethnographic and interview data, this paper explores the impacts of economic strain and job loss on the construction and experience of masculinity, as well as the effects of threats to masculine identity on family stability in a rural American community. It looks at these issues specifically with reference to the high correlation between poverty and single parenting, in order to better understand the causal mechanisms responsible for this link in a rural setting. It challenges the mainstream argument that it is women’s marriage choices that are mainly responsible for this correlation. Building on and extending the work of previous researchers, the paper argues that men’s experiences with masculinity in times of economic and labor market stress seriously undermine their abilities to sustain functioning relationships.

WP 05-02: Persistent Pockets of Extreme American Poverty: People or Place Based?
Mark D. Partridge and Dan S. Rickman. January 2005.

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.

WP 05-01: Trickling Down: Does Local Job Growth Reduce Poverty
Mindy Crandall and Bruce Weber. March 2005.

Was local job growth a significant determinant of poverty reduction between 1990 and 2000? This research takes advantage of newly available data and techniques to explore the job growth on tract-level poverty reduction. Spatial corrections to the model allow for more accurate identification of the significant determinants of poverty reduction across the United States. Results indicate that job growth is a highly significant predictor of poverty reduction, though its effect is modest. While spatial models didn't materially affect the regression coefficients, significant gains in model explanatory power were seen when using a spatial model as compared to OLS.