A Critical Review of Rural Poverty Literature: Is There Truly a Rural Effect?

Poverty rates are highest in the most urban and most rural areas of the United States and are higher in nonmetropolitan than metropolitan areas. Yet perhaps because only one-fifth of the nation's 35 million poor people live in nonmetro areas, rural poverty has received less attention than urban poverty from both policy makers and researchers. The authors provide a critical review of literature that examines the factors affecting poverty in rural areas. The authors focus on studies that explore whether there is a rural effect, that is, whether there is something about rural places above and beyond demographic characteristics and local economic context that makes poverty more likely in those places. The authors identify methodological concerns (such as endogenous membership and omitted variables) that may limit the validity of conclusions from existing studies that there is a rural effect. The authors conclude with suggestions for research that would address these concerns and explore the processes and institutions in urban and rural areas that determine poverty, outcomes, and policy impacts.