Education's Effect on Poverty: The Role of Migration

This is the authors' abstract. We don't add key points for this paper.

E is a key determinant of economic well-being for both individuals and places. Despite overall improvements, however, rural residents still have significantly lower educational attainment than urban residents. Improving the quality of education and encouraging students to stay in school is one possible strategy for reducing poverty and raising local well-being. A better-educated workforce should have higher incomes. Partridge and Rickman showed that both education levels and increases in attainment explained spatial variation in poverty reduction. Outmigration to metro areas is a potential obstacle to this strategy, however. Migration from rural areas occurs because of the lack of demand for a better-educated rural workforce and the necessity of leaving rural areas to attend college (Gibbs). Outmigration may prevent local human capital levels from reaching the threshold required to attract new industry or encourage expansion in the existing economic base. Even where robust rural job growth exists, the lower skill levels and wages offered by rural employers, on average, both dampen the poverty-reducing power of education and hinder long-term development prospects associated with an increasingly high-skill economy. This study documents a direct effect of education on householder poverty, but does not find an indirect effect through migration. Data from the Panel Study of Income Dynamics (PSID) is used to obtain a sample of 708 working-age (25–64 years of age) household heads that lived in a nonmetro county in 1993. The metropolitan and poverty status of these individuals is observed in 1999. For