The following report, funded by the Appalachian Regional Commission (ARC),
explores recent poverty trends for the 399 counties that comprise Appalachia,
and examines the Census Bureau's Small Area Income and Poverty Estimates'
[i] effects on the ARC distressed county designation. We begin
with an examination of the changes in total poverty in Appalachia between 1979
and the mid-1990s, with particular emphasis paid to the post-1990 period. The
gap in poverty between Appalachia and the rest of the country declined as poverty
outside Appalachia increased during the 1980s while remaining virtually unchanged
in Appalachia. The U.S. average poverty rate declined from 15.1 percent to
13.8 percent between 1993 and 1995, while poverty among Appalachian counties
declined from an average of 16.1 percent in 1993 to 14.6 percent in 1995.
The ARC counties with relatively higher rates of poverty are generally concentrated
in Kentucky, as well as West Virginia, southern Ohio, and Mississippi. Although
Appalachia has long been struggling economically, Appalachia's total poverty
rate in 1995 was only slightly higher than in the rest of the country.
Child poverty in Appalachia
increased slightly between 1989 and 1995, following the national pattern. In
particular, young children in Appalachia have experienced the greatest increases
in poverty, compared with older children and the general population. The geographical
patterns of total poverty and child poverty are overwhelmingly similar, with
higher rates of child poverty concentrated in eastern Kentucky, and significant
portions of northern Tennessee, West Virginia, southern Ohio, and Mississippi.
Between 1993 and 1995 relative increases in child poverty were most expansive
in Alabama, the Carolinas, and New York, followed by Kentucky, West Virginia,
Virginia, Pennsylvania, Mississippi, and Georgia. Only Ohio and Tennessee
experienced fairly consistent relative declines in child poverty during the
period. Similar to the overall poverty rates for the sub-regions, the Central
sub-region continued to experience the highest child poverty rates within Appalachia.
More than one-third of the children who lived in the Central sub-region lived
in households with incomes under the poverty line, with the poverty rates in
the other regions just over 20 percent. Poverty rates for children ages 0-4
years were, and continue to be, considerably higher than for children ages 5-17
years both nationally and in Appalachia. This gap was even wider for Appalachian
counties than for the remainder of the U.S., with 27.3 percent of children ages
0-4 in poverty, compared to 19.5 percent for children ages 5-17 in 1995.
The ARC has used the distressed county designation for almost twenty years
to identify counties with the most structurally disadvantaged economies. Each
year the ARC updates the distressed status of counties based on more current
information on unemployment and per capita market income. However, reliable
county-level poverty rates have, until recently, only been available from the
decennial census at the beginning of each decade. The Census Bureau SAIPE program
has produced county-level poverty estimates for 1989, 1993 and 1995, giving
the ARC the option of using more recent poverty data to classify counties.
We evaluate the influence of post-censal estimates of poverty on the traditional
distressed county classification, which uses only the estimates of poverty from
the most recent census, during both the 1980s and the early 1990s. Of the 399
Appalachian counties, the number designated as distressed increased between
1980 and 1990 by 50 percent. [ii]
This increase reversed a two-decade decline in the number of distressed
counties. Changing relative poverty levels were a factor in 10 of the 12 transitions
out of distressed status during the 1980s. Poverty did not contribute quite
as greatly to the much larger number of counties that became distressed in the
1980s.
Principally,
we use two analyses to evaluate the viability of the SAIPE for the ARC designation
of distressed counties. We first evaluate the accuracy of the distressed status
designation at the end of a decade, comparing the 1980 census with the 1989
SAIPE (using the 1990 census as the standard of accuracy). With certain caveats,
the results from the 1980s demonstrate that as a decade progresses, the SAIP
point estimates more accurately predict the status of both distressed and non-distressed
counties than the poverty estimates from the previous census. Then we examine
the causes of status transitions that would occur in the early 1990s incorporating
the SAIPE into the distressed county designation. The number of counties that
have been affected by economic change in the 1990s can be better evaluated and
joint changes in unemployment, income, and/or poverty can be distinguished from
changes in poverty alone. Between 1990 and 1994 the number of distressed counties
in Appalachia declined sharply (38 percent), due more to overall economic improvement
in Appalachia relative to the U.S. as a whole than by substitution of the SAIPE
for the 1990 census poverty estimates. Moreover, relative shifts in unemployment
played a more important role as an independent cause of these transitions out
of distressed status than did shifts in poverty.
The distressed
status accuracy results from the end of the 1980s suggest that the SAIPE would
provide a better determinant of distressed status than the poverty estimates
derived from a decade old census. The magnitude and causes of distressed status
transitions in the first half of the 1990s indicate that using the SAIP estimates
would alter the counties that would be designated distressed by the ARC but
not to a radical degree. However, both of these analyses demonstrate that a
simple substitution of the SAIP point estimates for census poverty estimates
may unjustifiably deny some counties distressed status recognition. As an
antidote to this situation it might be more defensible to combine the SAIP point
estimate and the SAIP upper bound estimate in the future determination of distressed
status. This would accomplish the objective of utilizing more current estimates
of poverty while reducing the negative consequences of utilizing an estimate
of poverty with greater statistical variation than decennial census derived
estimates.
Overall, the analysis of the
1990s indicates that the number of distressed counties has declined in Appalachia
during the decade. The Small Area Income and Poverty Estimates indicate
a decline in poverty in Appalachia relative to the U.S. as a whole, which reflects
a concomitant relative decline in unemployment and a relative increase in per
capita market income. Determination of distressed status using the 2000 Census
of Population and Housing poverty rates should confirm this decline. During
the next decade, the accuracy of the SAIPE program should improve significantly
as new sources of income and poverty data, especially the American Community
Survey (ACS), become available, making them an even more viable option for the
determination of distressed status by the Appalachian Regional Commission.
Notes
[i] The Census Bureau's Small Area Income and Poverty
Estimates are abbreviated as SAIPE. These will also be referred to as "SAIP
estimates" to focus on the numerical estimates themselves rather than the overall
statistical estimates program
[ii] The number of distressed counties in 1990 does
not correspond to the number of counties officially designated distressed by
ARC because distress levels were frozen during the 1988-1992 period awaiting
the release of 1990 census poverty data (Wood and Bischak 2000). The distressed
designation uses three year averages of unemployment and per capita market income.
Numbers in Table 4.1a are based on a formula for defining distressed counties
that incorporates poverty estimates from the last census, not the Census Bureau's
post-censal SAIPE estimates.
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