Out-migration, income and poverty in nonmetropolitan America

Why do rural households leave for urban places? And how does this decision affect their economic well-being? Rural places in the United States have higher poverty and unemployment rates and lower levels of educational attainment relative to urban places. Does leaving a rural place for a city offer a pathway out of poverty and to greater income? This dissertation examines these questions with data from the Panel Study of Income Dynamics. Four models of household economic outcomes are estimated for three periods: 1979 to 1985, 1985 to 1991, and 1991 to 1997. These models estimate the nonmetropolitan outmigration decision and the following economic outcomes: household poverty, cost-of-housing adjusted household poverty, household income, and cost-of-housing adjusted household income. All four models include an instrumental variable or variables to control for possible endogeneity between the migration decision and economic outcomes.;Empirical results indicate that nonmetropolitan out-migration increased poverty risk in the 1979 to 1985 period, yet had no statistically significant effect on any economic outcome during the latter periods. Educational attainment was found to be a significant, in the statistical and economic sense, determinant of economic outcomes. These findings suggest that human capital and other individual and household characteristics explained household poverty risk and income from 1985 to 1997 and that migrating out of nonmetropolitan counties had no effect. The evidence from this study indicates that rural anti-poverty policy should focus on human capital development. It does not support place-based policy.