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Challenging and Then Redesigning the National Poverty Measure Rural / Urban Cost of Living Differences


Term:

Fall

Department:

11: Urban Studies and Planning

Faculty Supervisor:

Amy Glasmeier

Faculty email:

amyglas@mit.edu

Apply by:

October 1, 2020

Contact:

amyglas@mit.edu

Project Description

I. Issues: A widely held belief is that it is cheaper to live in rural than in urban areas. Such a point of view encourages arguments that income measures of need that do not account for COL, such as the Federal poverty measure, are misleading and lend to inequitable distribution of supports. Past ERS and other efforts to validate differences in COL across locations using measures of material inputs, such as food, work-related expenses, and housing, have come to divergent conclusions. Scholarly efforts have sought to determine whether there are considerable differences in the cost of living across locations, using measures of material inputs, such as housing costs and food expenses. This controversy remains unsettled as more recently, our task is to utilize a unique data set to examine the circumstances cost of living differences across urban and rural areas. The recent passage of federal legislation to provide income supports to Americans losing their jobs due to the COVID Pandemic serves as a natural experiment to allow us to explore the cost of living differences in urban and rural areas. We propose to utilize a county-scale living wage calculator that tracks necessary living costs, including housing, food, utilities, transportation, child care, health care, and miscellaneous expenses, to examine the effects of cost of living differences across urban and rural counties. The tool utilizes estimates of different family income streams and family sizes. The tool allows us to explore how various components of the cost of living affect families in urban and rural areas. In this research, we propose two interrelated lines of inquiry: (1) Where/to what extent does rural COL vary from urban COL? What components of the cost of living are more critical in rural versus urban areas, and to what extent do the proportions of the elements of the cost of living differ across urban and rural areas? To what extent do the costs of employment such as child care and travel expenses particularly impact rural versus urban households? What contextual circumstances help explain those differences? (2) What impact do gaps in income supports such as state-level unemployment insurance levels and the earned income tax credit contribute to meeting household resource needs? How do these differ in effect in urban versus rural locations? III. Approach We will use a range of measures to explore the cost of living by labor market factors, economic structures, and policy variables. For example, we will utilize the ERS typology code https://www.ers.usda.gov/data-products/county-typology-codes.aspx. Our hypotheses center on the potential of differences due to the underlying industrial structure. For instance, given tourism as an economic base, we may find that this economic activity has a narrower gap between the cost of living and employment wage rates than it does a neighboring metro area. We will analyze counties based on the degree of rurality using the ERS rural-urban continuum code https://www.ers.usda.gov/data-products/rural-urban-continuum-codes.aspx and we will drill down to the place level within the rural-urban system to determine whether the implied wage rate that would accompany the occupational structure a more populated area makes a difference in costs of living.

Pre-requisites

Data analysis, interest in public scholarship and writing for the press, interest in geography and modeling of geographic processes.