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 United States from 1980 to 2016. Findings from previous research have shown that income inequality is positively associated with population change, but these studies have not explicitly tested for differences between the impacts of population growth and decline. Understanding the implications of population dynamics is particularly important given that many rural areas are characterized by population decline. We analyze county-level data (n=15,375 county-decades) from the Decennial Census and American Community Survey (ACS), applying fixed effects models to estimate the respective effects of population growth and decline on income inequality, to identify the processes that mediate the links between population change and inequality, and to assess whether these effects are moderated by county-level economic and demographic characteristics. We find evidence that population decline is associated with increased levels of income inequality relative to counties experiencing stable and high rates of population growth. This relationship remains robust across a variety of model specifications, including models that account for changes in counties’ employment, sociodemographic, and ethnoracial composition. We also find that the relationship between income inequality and population change varies by metropolitan status, baseline level of inequality, and region.

Income Inequality across the Rural‐Urban Continuum in the United States, 1970–2016*

“…The overall contours of income inequality dynamics at the national level are well documented (Morris and Western 1999; Piketty and Saez 2003; Saez 2017; Western, Bloome, and Percheski 2008). However, less is known about inequality at the sub‐national level, within localities (for recent exceptions see Butler et al 2020; Peters 2013; VanHeuvelen 2018). Yet, it is in these spaces where most social and economic interactions take place, and therefore, where inequality is most likely to be perceived in social interactions and to influence individuals' behaviors and outcomes (Brush 2007; Duncan 2014; McLaughlin, Stokes, and Nonoyama 2001).…”

“…In this study, we are particularly interested in understanding how levels of, and changes in, inequality vary between rural and urban areas. Settlement type, so defined, represents a distinctive place characteristic: population composition and social structure vary systematically across the rural‐urban continuum (Lichter and Brown 2011; Lichter and Ziliak 2017); and spatial isolation and population density—the ecological signatures of rurality and urbanicity—may also have independent associations with income inequality (Butler et al 2020; Moller et al 2009). For one, rural and urban populations vary with respect to a number of demographic characteristics and processes that are likely to be correlated with the distribution of income.…”

“…Moller et al's findings (2009) suggest the need to distinguish between cross‐sectional variation across the rural‐urban continuum—according to which rural counties have higher inequality—and longitudinal variation in the degree of urbanization within a county—according to which urbanization is positively associated with inequality. However, more recent estimates suggest that even these conclusions are tenuous (Butler et al 2020; VanHeuvelen 2018). We therefore take the direction of variation in inequality along the rural‐urban continuum as an empirical question.…”

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.…”

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

“…Alternatively, population decline should theoretically 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.…”