The determinants of rural population growth and decline, 1950-1990: the roles of government policy, human capital, and farm and nonfarm income

Tzu-Ling Huang

ISU General Staff Papers from Iowa State University, Department of Economics

Abstract: In the past few decades, changes in economic conditions for off-farm labor markets and improvements in agriculture technology have led to substantial reductions in farm population in the United States. However, rural populations are not decreasing uniformly, either across counties or over decades. Rates of change in farm and nonfarm populations vary widely across rural counties. The variation of population growth across counties and between farm and nonfarm population raise two questions in this study: (1) What affects the population growth and decline in US rural counties? (2) Do those factors affect farm and nonfarm populations differently?;This study is based on the human capital model of migration which emphasizes economic returns as the driving force for moves. For that reason, the study concentrates on individuals of working ages 20-64. Previous studies and human capital theory have shown that younger people have a greater incentive to move than older people. To focus on the population most sensitive to migration factors, the moves of a younger working age subgroup (individuals aged 20-34) are also examined;The results show that human capital investment, average income, the diversity of industrial mix, and predicted per capita local government tax revenue are major determinants of rural county population changes. Rural county population growth is neutral toward self-financed increased local government services in both age groups;Some major determinants of rural population growth, such as human capital, farm income, and local labor market conditions affect farm and nonfarm population differently. In addition, farm and nonfarm populations are sensitive to different local government policies.

Date: 1996-01-01
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