The Appalachian Region's economy has become significantly more diversified over the past 15 years. Once highly dependent on heavy industry, agriculture, and mining, the Region today is becoming increasingly reliant on jobs in service industries, retailing, and government.

In 1965, one in three Appalachians lived in poverty. By 1990, the poverty rate had been cut in half. These gains have transformed the Region from one of almost uniform poverty to one of contrasts: some communities have successfully diversified their economies; some are still adjusting to structural changes in declining sectors; and some severely distressed areas still require basic infrastructure, such as water and sewer systems.

These contrasts are not surprising in light of the Region's size and diversity. The Region includes 420 counties in 13 states. It extends more than 1,000 miles, from southern New York to northeast Mississippi, and is home to 23.6 million people.

Income Trends
Poverty Rates. The 1990 Census data show that metropolitan counties in northern and southern Appalachia had poverty rates slightly below the national average of 13.1 percent. In rural areas of northern and southern Appalachia, the poverty rate was 16 percent. In central rural Appalachia the poverty rate was nearly 27 percent. New poverty rate data from the 2000 census has just been released by the U.S. Census Bureau for the nation, states, and counties; more complete data is scheduled to be released in the fall of 2002, which will permit a regionwide analysis of changes in poverty rates.

Per capita Income. Per capita income, perhaps the best overall indicator of economic well being, grew strongly in the Region in the early 1990s, but began to slip between 1995 and 1999. In 1999, regional per capita income recovered to 81.9 percent of the U.S. average. This is a decline from the 1994 peak of 83.2 percent of the U.S. average.

Employment Trends
Appalachia's civilian labor force grew to more than 12.2 million in 2001, with increases registered in most counties, including the most economically distressed. The Region's three-year unemployment rate fell from 5.3 percent in the 1996–98 period to 4.6 percent in the 1998–2000 period but is still high compared with the national 1998–2000 rate of 4.2 percent. In addition, the Region's unemployment rate understates the lack of job availability because of the high number of discouraged workers who are not counted in the labor force. Labor force participation rates in Appalachia for 1998 were 61.6 percent, compared with 67.7 percent for the nation as a whole, and estimates of underemployment stood at 10 percent for Appalachia, compared with 8.6 percent for the nation.

Educational Trends
The Region's educational attainment levels have improved sharply since 1960. In 1990, for the first time, the share of people aged 18 to 24 with 12 or more years of schooling was slightly higher in Appalachia (77 percent) than in the U.S. (76 percent). However, considerable educational deficits remain, particularly in central Appalachia, where the average high school completion rate for this age group is only 68 percent. Reflecting the educational shortcomings of past decades, only 68.4 percent of Appalachian adults aged 25 years and older are high school graduates, compared with 75.2 percent for the United States. New educational attainment data from the 2000 census has just been released by the U.S. Census Bureau for the nation, states, and counties; more complete data is scheduled to be released in the fall of 2002, which will permit a region-wide analysis of changes in educational attainment.

Population Trends
According to the 2000 Census, Appalachia's population has grown to 22.9 million, gaining 1.9 million people since 1990. This population gain represents a 9.1 percent increase since 1990. This falls short of the 13.2 percent increase for the U.S. as a whole. Over the last ten years, 102 rural counties in Appalachia grew faster than the national rate.

Challenges to Reducing Economic Distress in Appalachia
Several national and international factors have substantially affected the Region's economic status in the past 10 years.

• The Region faces competition from imports in key industries, such as textiles and apparel manufacturing.
• In counties where manufacturing remains a dominant industry, declining real wages have eroded the income base. Moreover, high-wage, high-tech jobs have not developed in these manufacturing-dependent counties. The result is a widening income gap between these counties and the faster growing metropolitan counties where information services are concentrated.
• In many central Appalachian counties, the economic decline of the coal industry has contributed to their continued distress. Even with an anticipated rise in coal prices, the business and employment base of these counties is still expected to decline.
• Seventy-one distressed counties still have a high dependence on tobacco production. This poses another threat to the economy of the most vulnerable parts of the Region.

Regional Data
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Research Reports