Population Change and Income Inequality in Rural America

This paper examines the effects of population growth and decline on county-level income inequality in the rural United States from 1980 to 2016. Findings from previous research have shown that population growth is positively associated with income inequality. However, these studies are largely motivated by theories of urbanization and growth in metropolitan areas and do not explicitly test for differences between the impacts of population growth and decline. Examining the effects of both forms of population change on income inequality is particularly important in rural areas of the United States, the majority of which are experiencing population decline. We analyze county-level data (N = 11,320 county-decades) from the U.S. Decennial Census and American Community Survey, applying fixed effects regression models to estimate the respective effects of population growth and decline on income inequality within rural counties. We find that both forms of population change have significant effects on income inequality relative to stable growth. Population decline is associated with increases in income inequality, while population growth is marginally associated with decreases in inequality. These relationships are consistent across a variety of model specifications, including models that account for counties’ employment, sociodemographic, and ethno-racial composition. We also find that the relationship between income inequality and population change varies by counties’ geographic region, baseline level of inequality, and baseline population size, suggesting that the links between population change and income inequality are not uniform across rural America.