Hispanic Growth, Higher Rural Incomes

[imgbelt img=Hispersmap.gif]The Hispanic population is growing in rural America. And, yes, it’s a good thing economically, according to a new study.

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The Society Pages

This graph shows that many counties in the Great Plains lost white population; but many gained Hispanic population. A new paper finds that counties that gained Hispanic citizens generally had rising incomes.

Evidence reveals that where population decline has slowed or even reversed, it is because of the rapid growth in the Hispanic population. The analysis is unique due to our focus on one ethnic (immigrant) group; the growth of this group is the principal component in the population growth in a large number of non-metropolitan and previously depressed areas.

Our results indicate strong support for the hypothesis that Hispanic population growth has fueled increased growth in per capita income in those small, rural communities whose populations had been in decline during the 1970s and 1980s.

More specifically, we find that Hispanic population growth is positively linked to growth in per capita income in non-metropolitan counties but not in counties in small or large metropolitan areas.

Further, we find that Hispanic population growth is positively linked to faster income per capita growth in communities that had lost population in either the 1970s, the 1980s, or during both decades, but is generally associated with slower growth in communities whose population was growing during the 1970s and 1980s.

Specifically, we find the growth in the Hispanic population had a consistent positive effect on growth in income per capita only in non-metropolitan areas whose populations had been declining in the 1970s or 1980s. We find that a 10 percentage point increase in the Hispanic population leads to a 0.44 percentage point increase in the rate of growth of per capita income in non-metropolitan counties, where population had been declining in the 1970s or 1980s.

Comparing the 1980 – 1990 period to the 1990 – 2000 period, the mean Hispanic population growth rate in rural counties that had been losing population was increased by 144.5 percentage points (from 24.1% to 168.6%), while the economies of these counties grew by an average of 19.9% between 1980 to 1990 and by 26.3% from 1990 to 2000.

The values suggest that Hispanic population growth in these counties in the 1990s resulted in, on average, an increase in the growth rate in per capita income of 6.36 percentage points (from 19.9% between 1980 and 1990 to 25.7% between 1990 and 2000). Note that our evidence is consistent with a conclusion that any population growth in non-metropolitan counties that had been losing population would cause positive economic growth.

We focus on Hispanic population growth because in these rural counties the population is growing only because of Hispanic population growth (non-Hispanics are moving out).

A message from the Rural Assembly

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