Abstract
Poverty is a key indicator of economic hardship. By providing a geographic adjustment for cost of living, the recently developed Supplemental Poverty Measure has upended long-held views that poverty is higher in rural compared to urban America. In this study, we unpack the geographic adjustment underlying the Supplemental Poverty Measure and find that most of the difference is explained by the median rent index component rather than the housing tenure component. Further, we find that six states (Alabama, Georgia, Kentucky, Mississippi, North Carolina, and Ohio) account for over a third of the nonmetro poverty drop due to the median rent adjustment. We demonstrate that the demographic composition of the rural poor remains relatively unaffected despite this large drop, but find that the prevalence of poverty within demographic groups varies considerably. As a result, while the SPM is largely considered a more complete measure of poverty, the use of the median rent adjustment has important implications for the demographic understanding of rural poverty.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Change history
09 October 2020
In the original publication of this article, the article title has been mentioned incorrectly. The correct title provided in this correction.
Notes
Of note, although the OPM thresholds rely on the food budget and is multiplied by three, they are designed to measure the cost of all necessary goods and services; the SPM thresholds represent only the food, shelter, clothing, utilities, and miscellaneous goods. “Important adjustments are made to the resources to reflect other “necessary” expenses that are not included in the SPM thresholds, including taxes, work-related expenses and medical out-of-pocket expenses. These items would have to be added to the SPM thresholds or subtracted from the official thresholds before comparing the two amounts [OPM thresholds and SPM thresholds] (Renwick 2011, p. 11).”
Some have argued against any geographic adjustment, see (Nolan et al. 2017).
Other factors include spatially concentrated rural poverty; persistent poverty; work and poverty (e.g., the growth of the working poor); and, access to public welfare and the safety net.
A review of employment, human capital, and the safety net are beyond the scope of this paper, however, critical for understanding poverty in rural America. For example, research has shown an increasing share of the rural poor are out of work (Thiede et al. 2018) and the labor market has provided nonmetro families less protection from poverty compared to metro areas (Slack 2010). Multiple accounts show the safety net programs as a whole, lift greater percentages of rural families out of poverty relative to urban (Nolan et al. 2017; Rothwell and Thiede 2018; Ziliak 2018).
Note that the published SPM rate differs from the PUMS SPM rates.
References
Albouy, D. (2011). Report for cost of living and the supplemental poverty measure. Office of the Assistant Secretary for Planning and evaluation. U.S. Department of Health and Human Services. https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.422.4303&rep=rep1&type=pdf.
Bishaw, A. (2009). Adjusting poverty thresholds based on differences in housing cost: Application of American Community Survey. In: Poster presentation prepared for the Population Association of America. https://www.census.gov/content/dam/Census/library/working-papers/2009/demo/bishaw-paa-col-3-4.pdf.
Brady, D. (2003). Rethinking the sociological measurement of poverty. Social Forces, 81(3), 715–751. https://doi.org/10.1353/sof.2003.0025.
Brady, D., Finnigan, R. M., & Hübgen, S. (2017). Rethinking the risks of poverty: A framework for analyzing prevalences and penalties. American Journal of Sociology, 123(3), 740–786.
Castle, E. N., Wu, J., & Weber, B. A. (2011). Place orientation and rural–urban interdependence. Applied Economic Perspectives and Policy, 33(2), 179–204.
Cromartie, J., & Bucholz, S. (2008). USDA ERS—Defining the “Rural” in Rural America (Amber Waves). USDA Economic Research Service. https://www.ers.usda.gov/amber-waves/2008/june/defining-the-rural-in-rural-america/.
Economic Research Service, US Department of Agriculture. (2019). County Boundaries—U.S. Census Bureau, 2013. Rural-Urban Continuum Codes. https://www.ers.usda.gov/data-products/rural-urban-continuum-codes.aspx.
Flood, S., King, M., Rodgers, R., Ruggles, S., & Warren, J. R. (2019). Integrated Public Use Microdata Series, Current Population Survey: Version 6.0. IPUMS. https://doi.org/10.18128/D030.V6.0.
Fox, L. (2019). The Supplemental Poverty Measure: 2018 (p. 23). U.S. Census Bureau. https://www.census.gov/content/dam/Census/library/publications/2019/demo/p60-268.pdf.
Fox, L., Glassman, B., & Pacas, J. (2020). The Supplemental Poverty Measure using the American Community Survey (Working Paper Number 2020–09). US Census Bureau. https://www.census.gov/library/working-papers/2020/demo/SEHSD-WP2020-09.html.
Hirsch, B. (2011). Adjusting poverty thresholds when area prices differ: Labor market evidence. Office of the Assistant Secretary for Planning and evaluation, U.S. Department of Health and Human Services. https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.422.4303&rep=rep1&type=pdf.
Isserman, A. M. (2005). In the national interest: Defining rural and urban correctly in research and public policy. International Regional Science Review, 28(4), 465–499. https://doi.org/10.1177/0160017605279000.
Johnson, D., Shipp, S., & Garner, T. I. (1997). Developing poverty thresholds using expenditure data. Proceedings of the Government and Social Statistics Section, 28–37.
Johnson, K. M., & Lichter, D. (2016). Diverging demography: Hispanic and non-Hispanic contributions to US population redistribution and diversity. Population Research and Policy Review, 35(5), 705–725.
Jolliffe, D. (2006). Poverty, prices, and place: How sensitive is the spatial distribution of poverty to cost of living adjustments? Economic Inquiry, 44(2), 296–310.
Lichter, D., & Brown, D. L. (2011). Rural America in an urban society: Changing spatial and social boundaries. Annual Review of Sociology, 37, 565–592.
Lichter, D., & Schafft, K. (2016). People and places left behind: Rural poverty in the new century. In D. Brady & L. Burton (Eds.), The Oxford handbook of the social science of poverty (pp. 317–340). Oxford: Oxford University Press.
Lichter, D., & Ziliak, J. (2017). The rural-urban interface: New patterns of spatial interdependence and inequality in America. The ANNALS of the American Academy of Political and Social Science, 672(1), 6–25. https://doi.org/10.1177/0002716217714180.
Ludwig-Dehm, S. M., & Iceland, J. (2017). hispanic concentrated poverty in traditional and new destinations, 2010–2014. Population Research and Policy Review, 36(6), 833–850. https://doi.org/10.1007/s11113-017-9446-0.
Moffitt, R. (2015). The deserving poor, the family, and the US welfare system. Demography, 52(3), 729–749. https://doi.org/10.1007/s13524-015-0395-0.
National Research Council. (1995). Measuring poverty: A new approach. Washington, DC: The National Academies Press. https://doi.org/10.17226/4759.
Nolan, L. B., Waldfogel, J., & Wimer, C. (2017). Long-term trends in rural and urban poverty: New insights using a historical supplemental poverty measure. The Annals of the American Academy of Political and Social Science, 672(1), 123–142.
Nord, M. (2000). Does it cost less to live in rural areas? Evidence from new data on food security and hunger. Rural Sociology, 65(1), 104–125.
Renwick, T. (2011). Geographic adjustments of supplemental poverty measure thresholds: Using the American Community Survey five-year data on housing costs. Conference Paper Prepared for Allied Social Science Associations Annual Meeting.
Renwick, T. (2019, May 20). Supplemental Poverty Measure: .Alternative Geographic Adjustments. Washington, D.C.: Brookings Institution
Roback, J. (1982). Wages, rents, and the quality of life. Journal of Political Economy, 90(6), 1257–1278.
Rothwell, D. W., & Thiede, B. (2018). Child poverty in rural America (Vol. 34, No. 3). University of Wisconsin Institute for Research on Poverty. https://www.irp.wisc.edu/resource/child-poverty-in-rural-america/.
Ruggles, S., Flood, S., Goeken, R., Grover, J., Meyer, E., Pacas, J., & Sobek, M. (2019). IPUMS USA: Version 9.0. IPUMS. https://doi.org/10.18128/D010.V9.0.
Semega, J., Kollar, M., Creamer, J., & Mohanty, A. (2019). Income and poverty in the United States: 2018 (No. P60-266). United States Census Bureau. https://www.census.gov/library/publications/2019/demo/p60-266.html.
Slack, T. (2010). Working poverty across the metro-nonmetro divide: A quarter century in perspective, 1979–2003. Rural Sociology, 75(3), 363–387. https://doi.org/10.1111/j.1549-0831.2010.00020.x.
Smeeding, T. (2016). Poverty measurement. In D. Brady & L. Burton (Eds.), The Oxford handbook of the social science of poverty. Oxford: Oxford University Press.
Stommes, E. S., & Brown, D. M. (2002). Transportation in rural America: Issues for the 21st century.
Symens Smith, A., & Trevelyan, E. (2019). The Older Population in Rural America: 2012–2016. US Census Bureau. https://www.census.gov/library/publications/2019/acs/acs-41.html.
Thiede, B. C., Lichter, D., & Slack, T. (2018). Working, but poor: The good life in rural America? Journal of Rural Studies, 59, 183–193. https://doi.org/10.1016/j.jrurstud.2016.02.007.
Ulimwengu, J. M., & Kraybill, D. S. (2004). Poverty over time and location: An examination of metro-nonmetro differences. American Journal of Agricultural Economics, 86(5), 1282–1288.
Weber, B. (2018). Fifty years after The People Left Behind: The unfinished challenge of reducing rural poverty, (No. 34-2; Focus). Institute for Research on Poverty. https://www.irp.wisc.edu/resource/focus-focus-342-october-2018/.
Ziliak, J. (2018). Are rural Americans still behind? (No. 34-2; Focus). Institute for Research on Poverty. https://www.irp.wisc.edu/resource/focus-focus-342-october-2018/.
Ziliak, J. (2011). Cost of living and the supplemental poverty measure. A Research Forum Report Submitted to the Office of the Assistant Secretary for Planning and Evaluation, US Department of Health and Human Services. Available from https://www.Ukcpr.Org/Sites/Www.Ukcpr.Org/Files/Documents/UKCPR_COL%26SPM_Forum_withAppendices, 20.
Zimmerman, J. N., Ham, S., & Frank, S. M. (2008). Does it or doesn’t it? Geographic differences and the costs of living. Rural Sociology, 73(3), 463–486.
Acknowledgements
We are thankful for excellent feedback from participants and organizers of the Annie E. Casey Foundation RUPRI Rural Poverty Research & Policy Fellowship Roundtable Madison, IN May 2019. We are especially thankful for the cartographic help of Jonathan Schroeder and David Van Riper.
Funding
This research supported by funding from the Annie E. Casey Foundation RUPRI Rural Poverty Research & Policy Fellowship, the Agricultural Experiment Station multistate project W4001, support from the Minnesota Population Center (P2C HD041023) funded through a grant from the Eunice Kennedy Shriver National Institute for Child Health and Human Development (NICHD).
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Appendix
Appendix
See Tables
5,
6,
7,
8,
9,
10,
11 and
12.
Rights and permissions
About this article
Cite this article
Pacas, J.D., Rothwell, D.W. Why is Poverty Higher in Rural America According to the Supplemental Poverty Measure? An Investigation of the Geographic Adjustment. Popul Res Policy Rev 39, 941–975 (2020). https://doi.org/10.1007/s11113-020-09612-9
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11113-020-09612-9