Abstract
In recent decades, labor force participation across the United States has declined but the reasons remain unclear. While some point to structural changes in the labor market composition as the driving factor, others argue that increases in the take-up of welfare and disability payments are to blame. Most existing studies document trends driven by labor market performance in major metropolitan areas. In this chapter, we analyze recent trends in the employment-to-population ratio and real wages, focusing instead on nonmetropolitan areas—the places left behind. Nonmetro areas have not recovered as quickly as metro areas have from the Great Recession. Less-educated workers in nonmetro areas employed in the manufacturing sector have fared the worst in terms of real wages. Overall, our results suggest that the decline in labor force participation rates in rural areas can be explained by a relative reduction in productivity rather than changes in welfare take-up.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
According to U.S. Census 2017 population estimates. Using older metropolitan definitions would produce a higher rural/nonmetropolitan share.
- 2.
Source is U.S. Bureau of Economic Analysis (BEA) data.
- 3.
In 2017 dollars.
- 4.
This is WagesNonM/WagesMetro and \( {\left(\frac{Emp}{Pop}\right)}_{NonM}/{\left(\frac{Emp}{Pop}\right)}_{Metro} \).
- 5.
For example, if the rural manufacturing employment share is 10.7% and the metropolitan manufacturing share is 6.2%, then 100∗10.7/6.2 equals a 171.3% higher nonmetro farm share.
References
Aaronson, S., Cajner, T., Fallick, B., Galbis-Reig, F., Smith, C., & Wascher, W. (2014, September). Labor force participation: Recent developments and future prospects (Finance and Economics Discussion Series Working Paper). Washington, DC: Federal Reserve Board. Retrieved from https://www.federalreserve.gov/pubs/feds/2014/201464/201464pap.pdf.
Ali, K., Partridge, M. D., & Rickman, D. S. (2011). International immigration and domestic out-migrants: Are domestic migrants moving to new jobs or away from immigrants? The Annals of Regional Science, 49(2), 397–415. https://doi.org/10.1007/s00168-011-0456-2
Autor, D. H., Katz, L. F., & Kearney, M. S. (2008). Trends in U.S. wage inequality: Revising the revisionists. Review of Economics and Statistics, 90(2), 300–323. https://doi.org/10.1162/rest.90.2.300
Bartik, T. J. (1993). Who benefits from local job growth: Migrants or the original residents? Regional Studies, 27(4), 297–311. https://doi.org/10.1080/00343409312331347575
Blau, D. M., & Goodstein, R. M. (2010). Can social security explain trends in labor force participation of older men in the United States? The Journal of Human Resources, 45(2), 328–363. Retrieved from https://www.jstor.org/stable/25703459
Borjas, G. J. (2003).The labor demand curve is downward sloping: Reexamining the impact of immigration on the labor market (Working Paper No. 9755). Cambridge, MA: National Bureau of Economic Research. Retrieved from http://www.nber.org/papers/w9755.
Borjas, G. J. (Ed.). (2007). Mexican immigration to the United States. Chicago: University of Chicago Press.
Brown, J. P. (2014). Production of natural gas from shale in local economies: A resource curse or blessing? Economic Review, 99(1), 119–147.
Carlino, G., & Mills, L. (1996). Convergence and the U.S. states: A time-series analysis. Journal of Regional Science, 36(4), 597–616. https://doi.org/10.1111/j.1467-9787.1996.tb01120.x
Cromartie, J. (2017). Rural America at a glance. (Economic Information Bulletin 182). Washington, DC: United States Department of Agriculture, Economic Research Service. Retrieved from https://www.ers.usda.gov/webdocs/publications/85740/eib-182.pdf?v=0.
Dube, A., & Kaplan, E. (2010). Does outsourcing reduce wages in the low-wage service occupations? Evidence from janitors and guards. ILR Review, 63(2), 287–306. https://doi.org/10.1177/001979391006300206
Elsby, M. W., Hobijn, B., & Sahin, A. (2010). The labor market in the great recession (Working Paper No 15979). Cambridge, MA: National Bureau of Economic Research. Retrieved from http://www.nber.org/papers/w15979.
Goetz, S. J., Partridge, M. D., Rickman, D. S., & Majumdar, S. (2011). Sharing the gains of local economic growth: Race-to-the-top versus race-to-the-bottom economic development. Environment and Planning C: Politics and Space, 29(3), 428–456. https://doi.org/10.1068/c1077r
Goetz, S. J., Partridge, M. D., & Stephens, H. M. (2018). The economic status of rural America in the President Trump era and beyond. Applied Economic Perspectives and Policy, 40(1), 97–118. https://doi.org/10.1093/aepp/ppx061
Hunt, J., & Gauthier-Loiselle, M. (2010). How much does immigration boost innovation? American Economic Journal: Macroeconomics, 2(2), 31–56. https://doi.org/10.1257/mac.2.2.31
Katz, L. F., & Murphy, K. M. (1992). Changes in relative wages, 1963–1987: Supply and demand factors. The Quarterly Journal of Economics, 107(1), 35–78. https://www.jstor.org/stable/2118323
Kilkenny, M., & Partridge, M. D. (2009). Export sectors and rural development. American Journal of Agricultural Economics, 91(4), 910–929. https://doi.org/10.1111/j.1467-8276.2009.01320.x
Krugman, P. (2018, March 24). Trade and the cities (Wonkish). The New York Times. Retrieved from https://www.nytimes.com/2018/03/24/opinion/trade-and-the-cities-wonkish.html
Munasib, A., & Rickman, D. S. (2015). Regional economic impacts of the shale gas and tight oil boom: A synthetic control analysis. Regional Science and Urban Economics, 50(1), 1–17.
Orrenius, P. M., & Zavodny, M. (2007). Does immigration affect wages? A look at occupation-level evidence. Labour Economics, 14(5), 757–773. https://doi.org/10.1016/j.labeco.2006.09.006
Ottaviano, G. I. P., & Peri, G. (2012). Rethinking the effect of immigration on wages. Journal of the European Economic Association, 10(1), 152–197. https://doi.org/10.1111/j.1542-4774.2011.01052.x
Partridge, M. D., Ali, K., & Olfert, M. R. (2010). Rural-to-urban commuting: Three degrees of Integration. Growth and Change, 41(2), 303–335. https://doi.org/10.1111/j.1468-2257.2010.00528.x
Partridge, M. D., & Olfert, M. R. (2011). The winners’ choice: Sustainable economic strategies for successful 21st-century regions. Applied Economic Perspectives and Policy, 33(2), 143–178. https://doi.org/10.1093/aepp/ppr006
Partridge, M. D., Rickman, D. S., Ali, K., & Olfert, M. R. (2008). Lost in space: Population growth in the American hinterlands and small cities. Journal of Economic Geography, 8(6), 727–757. https://doi.org/10.1093/jeg/lbn038
Partridge, M. D., Rickman, D. S., Ali, K., & Olfert, M. R. (2010). Recent spatial growth dynamics in wages and housing costs: Proximity to urban production externalities and consumer amenities. Regional Science and Urban Economics, 40(6), 440–452. https://doi.org/10.1016/j.regsciurbeco.2010.05.003
Partridge, M. D. & Tsvetkova, A. (2018). Local ability to “rewire” and socioeconomic performance: Evidence from U.S. counties before and after the Great Recession. (Unpublished manuscript).
Perez-Silva, R., Partridge, M. D., & Foster, W. E. (2018). Are foreign-born researchers more innovative? Self-selection and the production of knowledge among PhD recipients in the USA. Journal of Geographical Systems, 1–38. https://doi.org/10.1007/s10109-018-0281-6
Rey, S. J., & Montouri, B. D. (1999). US regional income convergence: A spatial econometric perspective. Regional Studies, 33(2), 143–156. web.pdx.edu/~crkl/SEAUG/papers/Rey_RS99.pdf.
Rickman, D. S., Wang, H., & Winters, J. V. (2017). Is shale development drilling holes in the human capital pipeline? Energy Economics, 62(1), 283–290.
Rothstein, J. (2011). Unemployment insurance and job search in the Great Recession (pp. 143–214). Washington, DC: Brookings Papers on Economic Activity. https://www.brookings.edu/wp-content/uploads/2011/09/2011b_bpea_rothstein.pdf
Stephens, H. M., & Partridge, M. D. (2011). Do entrepreneurs enhance economic growth in lagging regions? Growth and Change, 42(4), 431–465. https://doi.org/10.1111/j.1468-2257.2011.00563.x
Tsvetkova, A., & Partridge, M. D. (2018). Knowledge-based service economy and firm entry: An alternative to the Knowledge Spillover Theory of Entrepreneurship. Small Business Economics. https://www.researchgate.net/publication/329911566_Knowledge-based_service_economy_and_firm_entry_An_alternative_to_the_Knowledge_Spillover_Theory_of_Entrepreneurship
Weiler, S. (2001). Unemployment in regional labor markets: Using structural theories to understand local jobless rates in West Virginia. Industrial and Labor Relations Review, 54(3), 573–591. https://doi.org/10.2307/2695990
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2020 Springer Nature Switzerland AG
About this chapter
Cite this chapter
Partridge, M.D., Pérez-Silva, R., Schreiner, S. (2020). Employment and Wages in the Places Left Behind. In: Glick, J., McHale, S., King, V. (eds) Rural Families and Communities in the United States. National Symposium on Family Issues, vol 10. Springer, Cham. https://doi.org/10.1007/978-3-030-37689-5_3
Download citation
DOI: https://doi.org/10.1007/978-3-030-37689-5_3
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-37688-8
Online ISBN: 978-3-030-37689-5
eBook Packages: Behavioral Science and PsychologyBehavioral Science and Psychology (R0)