On Persistent Poverty in a Rich Country

Abstract

We examine differences in income within the U.S., and the regions of persistent poverty that have arisen, using a newly assembled dataset of counties that links historical 19 th century Census data with contemporaneous data. The data, along with an augmented human capital growth model, permit us to identify the roles of contemporaneous differences in aggregate production technologies and factor endowments, in conjunction with the historical roles of institutions, culture, geography, and human capital. We allow for possible cross-county factor mobility via a correlated random effects GMM estimator that identifies simultaneously the coefficients on time varying and time-invariant determinants of income. We find evidence of significant regional differences in production technologies, but our decompositions of the poor/non-poor income gap suggests that at least three fourths of the gap is explained by differences in productive factors. Persistently poor counties are different (and poorer) primarily because they have lower levels of factors of production, not because they use the factors they have less efficiently. While much of the income difference is explained by contemporary factors, the contribution of historical levels of human capital is surprisingly large. The combined contribution of historical and contemporary human capital is striking: together, they explain nearly 60 percent of the overall income gap between the persistently poor and non-poor counties.

Health Insurance and Hospital Supply: Evidence from 1950s Coal Country

“…Medicare and Medicaid had not yet been established (these programs began providing benefits in 1966), and state and local governments primarily provided medical care through public health clinics and 14 We define counties as being part of the ARC 1967 definition of Appalachian counties. Appalachia is a rural area in the Eastern United States where historically communities have large shares of families living in poverty who suffer from poorer health and coal serves as the economic base in many areas (Black, McKinnish and Sanders 2005, Bollinger, Ziliak and Troske 2011, Cowen, et al 2012, Islam, Minier and Ziliak 2015. 15 Other studies have noted that there was a greater share of for-profit hospitals in coal mining areas, particularly in Central Appalachia, than in the rest of the country (Hamilton 1962).…”

Prolonging Coal’s Sunset: The Causes and Consequences of Local Protectionism for a Declining Polluting Industry

“…Their local economies experience slower economic growth and lower productivity than the rest of the nation (Islam, Minier, andZiliak 2015 andBollinger, Ziliak, andTroske 2011).…”

A Randomized Controlled Trial Measuring Effects of Extra Supplemental Nutrition Assistance Program (SNAP) Benefits on Child Food Security in Low-Income Families in Rural Kentucky

“…In 16 of the 17 counties included in the study, poverty rates were >20% in each of the last 5 decennial censuses. [12][13][14] Approximately 38% of households in this region received SNAP benefits in the period immediately before the project and 32% of households had children. 15,16 Eligible households were those that resided in the 17-county study area, were receiving SNAP, had at least 1 child who would be younger than 18 years throughout the study, and had an income exceeding the existing SNAP deductions so that the new deductions would result in increased SNAP benefits.…”