CHOICES
A publication of AAEA
The topic of poverty and inequality has gained renewed public interest with recent publications on inequality and economic mobility by Thomas Piketty (2014) and Raj Chetty et al. (2014). Piketty argues that inequality is a central feature of capitalism and can be remedied only through government policy. He also speaks of improving education, skills, technological innovation, and diffusion as means for correcting inequities.
Chetty et al., focusing on intergenerational mobility, find substantial variations in mobility across areas within the United States and that higher parental income is associated with more child income in the future. They also identify less residential segregation, less income inequality, better primary schools, greater social capital, and greater family stability as factors correlated with upward mobility. Equally important to and interconnected with the subject of mobility and inequality is poverty.
Similar to the relationship between intergenerational incomes in Chetty et al., Mark Partridge points out in this theme of Choices, “more poverty today causes more poverty in the future through its intergenerational nature.” Government policies and programs, improving education and skills, and technological innovation have been linked to poverty reduction in general. Poverty has also been connected to residential segregation, income inequality, and social capital.
At the geographic level, poverty in the United States is overwhelmingly a rural phenomenon. Although the overall poverty rate in rural America declined slightly between 1990 and 2000, it has inched up by a considerable margin a decade later. Compared to rural America, urban America has been experiencing lower poverty rates. This gap has existed since the 1960s, when the poverty rates were first officially calculated, and it has been widening in the last few years. In December 2013, the Federal Reserve Bank of Atlanta (FRBA) hosted a research symposium on rural poverty issues in the United States (FRBA, 2013). While the symposium discussed a wide range of issues—including concentrated and persistent poverty, demography and poverty, social and cultural aspects, safety net programs and place-based policies—one of the themes that arose was the relationship between food and poverty. This Choices theme features three articles based on presentations from the symposium: one that focuses on costs of high poverty to society and general policy approaches for poverty alleviation; and two articles that focus on the relationship between poverty and food.
The article by Partridge points out that poverty is a problem but too often it is ignored and rural poverty is even more overlooked most probably due to its dispersed nature. He discusses the costs to the broader society of high levels of poverty. For example, he argues that low income citizens have worse health outcomes and that poverty is linked to higher inequality which then can be linked to less economic growth in the global economy. Therefore, the United States cannot compete if a large share of its population is not contributing to their fullest capacity. He ends the article with some suggestions in order to make tangible reductions in poverty.
The article by Tim Slack addresses the geography of food stamp receipts by examining changes in them across U.S. counties during the Great Recession and identifying how changes in other local characteristics were associated with this outcome. He finds substantial local-level variations in the change in food stamp use during the recession, and that counties with higher levels of participation change tend to be regionally clustered. He further shows that areas where the signature characteristics of the Great Recession were most pronounced were precisely the places where food stamp use jumped most rather than places with historically high levels of food stamp participation. The article suggests regionally targeted outreach and investment in food stamps and the use of the program as a responsive form of local stimulus during periods of economic crisis as potential areas for policy.
The article by Canto, Brown, and Deller focuses on food access and rural poverty. It presents a review of literature that studies the effects of food access on poverty and health and a summary of an analysis of access to food, health outcomes and rural poverty. Authors find a strong relationship between rural poverty and health where higher poverty is associated with poorer levels of public health. They also find that higher levels of healthy food access are associated with better health outcomes. Finally, they argue that the interplay between local foods, poverty and health is subtle, emphasize the need for more research before effective policies can be crafted, and present some ideas for future research.
Chetty, R., N. Hendren, P. Kline, and E. Saez. (2014). Where is the land of opportunity? The geography of intergeneration mobility in the United States. National Bureau of Economic Research. Working paper 19843. January. Available online: http://www.nber.org/papers/w19843
Federal Reserve Bank of Atlanta. (2013). Rural poverty research symposium. December 2-3, 2013. Available online: http://www.frbatlanta.org/news/conferences/13rural_poverty_symposium.cfm
Piketty, T. (2014). Capital in the 21st Century. Cambridge, Mass.: Harvard University Press.
