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This report, “Poverty and Work: Utilization of Labor Resources Among the Rural Poor,” by Jill L. Findeis and Stephen M. Smith, was prepared for the Ford Foundation’s Rural Poverty Program and the Rural Economic Policy Program of the Aspen Institute in November 1992. The study investigates the nature of poverty among individuals in nonmetropolitan (rural) areas of the U.S., focusing on the frequency and duration of poverty spells and the role of market work in alleviating poverty. It utilizes longitudinal data from the Panel Study of Income Dynamics (PSID) from 1968-87, specifically an “ever-nonmetro ever-poor” (ENEP) sample of 7,448 individuals.Key findings and areas of focus include:
- Characteristics of Rural Poverty: Rural poverty differs from common perceptions; a higher proportion of rural households are poor, and these households are more likely to be white, less likely to be female-headed, and often include “working poor” individuals. Many poor rural households have two parents present, unlike urban poor households.
- Duration and Frequency of Poverty: The study differentiates between chronically/persistently poor, frequently poor (multiple spells), and temporarily poor individuals. The majority of the ENEP sample (at least 86%) experienced extended or multiple spells of poverty. Chronically poor households are often female-headed, and children are significantly represented in families with chronic or multiple spells of poverty.
- Factors Affecting Poverty: Education and race play critical roles, with lower high school completion rates and a higher likelihood of being nonwhite among the chronically poor. While a high school education is associated with shorter poverty durations, it doesn’t guarantee immunity from poverty, especially in rural areas where underemployment can be an issue.
- Participation in Market Work: The study examines the extent to which potential earners in poor and at-risk nonpoor families participate in market work. It notes significant differences in employment rates between poor and nonpoor household heads and spouses. For example, female spouses’ work participation is strongly linked to a household’s poverty status.
- Strategies for Exiting Poverty: The report explores various work-related strategies families use to move out of poverty, such as increasing work time (multiple jobs, overtime, additional earners), changing family structure (marriage/co-habitation), or increasing returns to work (migrating, changing jobs, pursuing education). The study uses event history analysis to identify factors associated with transitions out of poverty, considering demographic characteristics, work strategies, and local economic conditions.
The report aims to provide a better understanding of how market work impacts rural families’ ability to escape poverty, emphasizing the critical nature of this work-poverty linkage in rural economies.
