The recent presidential election and the extensive coverage of voting patterns raised awareness of an apparent “divide” between urban and rural populations.
Differences often noted include age, income, educational attainment, and race. The economic divergence is notable, with the fastest growing industries concentrated in urban areas, while rural areas are experiencing slower expansion.
The most common definition of “rural” from an economic perspective means located in a county which is not part of a metropolitan statistical area (MSA). The Office of Management and Budget, part of the Executive Office of the President, defines MSAs as core urban areas of 50,000 or more population, including the county or group of counties that have a high degree of social and economic integration with the urban core. Rural counties often include small or even sizable communities, and many counties in MSAs also have sparsely populated areas.
In Texas, 172 of the state’s total of 254 counties are classified as rural. Fewer than 3.1 million of the estimated 2016 Texas population of almost 27.7 million (about 11 percent of Texans) live in these rural areas. Nationally, the U.S. Department of Agriculture (USDA) estimates that approximately 46.2 million Americans (roughly 14 percent of the U.S. population) live in a rural county. Thus, despite our rich agrarian heritage in Texas, we now have a greater urban concentration than the country as a whole.
Rural residents tend to be older, as younger people appear to be leaving rural areas for the opportunities in urban areas. Older household heads, however, often remain in the rural locations.
Average income levels are generally lower in rural areas. This disparity can be partly explained by a lower labor force participation rate (with national data indicating participation of around 60% in rural areas and nearly 64 percent in urban areas), which is in turn partially explained by the fact that people in rural areas of the state tend to be older and labor force participation drops with age.
Even with this significant difference in median income levels, however, poverty rates in rural areas (16.8 percent nationally in 2015) are comparable to those in the principal cities of urban areas (16.9 percent). The rate in MSAs comes in at 13.1 percent, with the lowest poverty in areas inside MSAs, but not in the principal city. The U.S. Census Bureau’s Supplemental Poverty Measure, which accounts for things like variations in the cost of living and taxes, shows poverty in rural areas across the US (13.2 percent) is actually lower than the rate in MSAs (14.5 percent).
In terms of education, data for rural areas indicates some gap. A study prepared for the Texas Department of Housing and Community Affairs by Bowen National Research estimates that 25.4 percent of people in rural counties in the state did not graduate from high school, compared to 24.1 percent of urban residents. For all rural regions, 20.9 percent of people are college graduates or hold advanced degrees, compared with 29.9 percent of the urban population. However, younger people are more likely to have college degrees than older people, and there are more young people in urban areas than in rural parts of the state. Therefore, part of the difference in educational attainment in rural versus urban areas could be attributed to the age of individuals living in these locations.
The economic health of rural counties varies with the presence (or absence) of industry concentrations. The highest rural median household incomes were in counties with the recreation industry as their greatest economic support, according to the USDA. Rural counties actually weathered the recent recession fairly well due to the stable nature of most jobs and the diversity of industries. According to the study by Bowen National Research, no industry sector within any rural region represents more than 18.1 percent of the respective job base. Thus, a downturn in one industry has less effect on the economy of the region as a whole.
Over the past ten years, Texas rural counties have seen a total increase in population of about four percent (129,500), while urban counties have expanded by 20 percent (4.159 million). Similarly, the number of rural jobs has grown much slower, with a total increase of 11 percent since 2006, compared to 21 percent in urban counties. Looking ahead, our latest forecast calls for somewhat faster expansion in the rural counties over the next decade than was experienced in the recent past. However, urban areas will dominate growth, accounting for the vast majority of new jobs and residents.
The differences between urban and rural economies are very real, and the lion’s share of future opportunities will be in the growth industries found in urban centers. Fewer job options in rural areas will contribute to an ongoing migration of younger people to cities, leaving most rural counties with aging populations that are hardly growing (or even shrinking, in some cases). There will be implications for voting patterns, social services, and a spectrum of other aspects of society. Even so, the urban-rural divide we have heard so much about is at times overstated, with differences in demographics clouding the picture and skewing the statistics.
Editor’s Note: The main illustration accompanying this guest column is provided by the U.S. Bureau of Labor Statistics.
