Income Inequality Primary Cause of Rural Child Poverty
USDA report shows the Great Recession had a bigger and longer impact on rural young people.
An increase in child poverty associated with the 2007 Great Recession started earlier, climbed higher, and lasted longer for rural families than urban ones, a new report shows.
“The growth in rural child poverty predated the recession [by four years], and it continued to rise until 2012, three years after the recession was officially over,” according to the report from USDA’s Economic Research Service. “Urban child poverty, by contrast, peaked in 2010, and has fallen gradually since then.”
A primary cause of increased child poverty for both rural and urban families was income inequality, the report said. The poorest one-quarter of American families saw a bigger decrease in their incomes before and during the Great Recession than families in higher income brackets. And the earnings of these low-income families didn’t bounce back as quickly or as much following the recession.
The report compares child-poverty rates of urban and rural America from 2003 to 2014.
NOTE: Co-author Thomas Hertz of the USDA Economic Research Service will present a webinar explaining the report’s findings 1 p.m. Monday, May 23. More information.
From 2003 to 2012, the rural child poverty rate grew by 6.6 points from 20.1 to 26.7 percent, the highest rate since at least 1968. Over the same period, the child poverty rate in urban America grew by 3.8 points, from 17.1 to 20.9 percent.
Child poverty in rural America dropped by 3 points from 2012-2014. Though this was a bigger drop than urban children experienced, the overall rural child-poverty rate remained higher during the period (23.7 percent for rural vs. 20.7 for urban).
Poverty rates are based on family income and size. For a family of four, poverty is currently defined as earning $24,250 or less annually.
The report, written by Thomas Hertz and Tracy Farrigan, sought to explain why rural child poverty grew even while the American economy was expanding.
The researchers found that most of the problem resulted from the nation’s poorest families experiencing an above-average drop in income levels. So during periods when the average family was seeing an increase in income, such as from 2003 to 2007, the income of the nation’s poorest families was declining. That pushed more children into poverty.