Population Change and Income Inequality in Rural America

Abstract

This paper examines the effects of population growth and decline on county-level income inequality in the rural United States from 1980 to 2016. Findings from previous research have shown that population growth is positively associated with income inequality. However, these studies are largely motivated by theories of urbanization and growth in metropolitan areas, and do not explicitly test for differences between the impacts of population growth and decline. Examining the effects of both forms of population change on income inequality is particularly important in rural counties of the United States, the majority of which are experiencing population decline. We analyze county-level data (N=11,320 county-decades) from the U.S. Decennial Census and American Community Survey, applying fixed-effects regression models to estimate the respective effects of population growth and decline on income inequality within rural counties. We find that both forms of population change have significant effects on income inequality relative to stable growth. Population decline is associated with increases in income inequality, while population growth is marginally associated with decreases in inequality. These relationships are consistent across a variety of model specifications, including models that account for counties' employment, sociodemographic, and ethno-racial composition. We also find that the relationship between income inequality and population change varies by counties' geographic region, baseline level of inequality, and baseline population size, suggesting that the links between population change and income inequality are not uniform across rural America.

The Changing Landscape of Affordable Housing in the Rural and Urban United States, 1990–2016*

“…Alternatively, population decline could lead to excess housing stock resulting in decreased housing prices for those who remain in these places (Mulder 2006). The vast majority of counties that have experienced population decline in these studies are also classified as rural (Butler et al 2020; Johnson and Lichter 2019), which for this study may mean that population change may also be associated with larger relative changes in affordability in rural counties compared to urban counties.…”

“…Population growth is also related to income inequality. Butler and colleagues (2020) found that high growth nonmetropolitan counties experienced a decline in income inequality relative to stable growth counties, while population decline counties became more unequal over time. Similar trends may cross over to inequality in affordability, where growing populations create more equitable housing markets and it is easier for households of all income groups to find suitable housing.…”

Growing Up in Rural America

“…Lack of economic opportunities in rural areas is one of the primary drivers of outmigration (McLaughlin, Shoff, and Demi 2014;Petrin, Schafft, and Meece 2014). Depopulation, in turn, exacerbates income inequality (Butler et al 2020).…”

Decomposing Changes in Subnational Income Inequality in the United States, 1980-2019

“…Changes in income inequality across the United States have played out unevenly across space, with levels and changes in inequality varying considerably across localities (Butler et al 2020;Peters 2012;Thiede et al 2020;Van Heuvelen 2018). For example, the range of countylevel Gini Indexes exceeded 30 points between 1970 and 2000, from 23.7 to 57.9 (Moller et al 2009).…”

“…Prior research has identified important socioeconomic and demographic determinants of local income inequality (Alderson and Nielsen 1999;Butler et al 2020;Moller et al 2009;Peters 2012;Van Heuvelen 2018), including ethno-racial composition, population size and structure, industrial structure, and educational attainment. Identifying the strength and direction of these correlates has allowed scholars to evaluate a number of important theories.…”