why some rural communities prosper while others do not · kurt vonnegut, breakfast of champions,...
TRANSCRIPT
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Why Some Rural Communities
Prosper While Others Do Not
Rural Partners of Michigan
2009 Small Town and Rural Development Conference
Crystal Mountain, Thompsonville, MI
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Prosperity—A Useful Lens for
Rural Development
Rural Distress
Regional Competitiveness
Regional Growth
Rural Advocacy
Regional Coordination
Regional Cooperation
Rural Prosperity
– People oriented
– Community based
– Outcome focused
– Results driven
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
I never hear that word anymore: Prosperity. It used to be a synonym for Paradise.
Kurt Vonnegut, Breakfast of Champions, 1973, p. 2
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Four Puzzles for Today
1. What is rural?
2. What is prosperity?
3. How are prosperous places different?
4. What does prosperity imply for
The Michigan Model?
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
The Michigan Model
Jack Schultz
George Erickcek
Mark Drabenstott
Milan Wall
Ernesto Sirolli
Carole Summers
Christine Hamilton-Pennell
Tom Sander
Luther Snow
Oscar
Rodriquez
Don Macke
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
System I. Urban and Rural Areas
Urban Areas
3,634
urban areas
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
U.S. Population Distribution, 2000
97.3%20%--163,441,83355,109,924Rural
0.2%4%2,2411,3828,08411,168,8782.5-10k
0.2%4%6811,4767,07410,440,39510-25k
0.2%3%2461,5765,4478,586,25225-50k
0.2%5%2011,7507,96213,930,82050-100k
0.3%8%1371,85911,43021,250,457100-250k
0.3%7%561,9559,44518,463,669250-500k
0.3%8%342,25710,35523,374,417500-1000k
1.0%42%383,43734,649119,097,094> million
% of US
Area
% of US
pop
# of Urban
AreasDensityTotal AreaPopulation
Size
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
OMB Type
Metro
Micro
Non-core
Phoenix
154,000 rural,
Tucson 72,000
System II. Rural-Urban Integration
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Common Practice
Rural = Nonmetropolitan
� unless otherwise noted, the terms “nonmetro” and “rural” are used interchangeably
– Housing Assistance Council, 2003
� Approximately 25 percent of the nation’s population live in 2,187 counties deemed ‘non-metropolitan,’ or rural
– National Association of Counties, 2006
� We use the words “nonmetropolitan” and “rural”interchangeably, as we do the terms urban and metropolitan.
– Kenneth Johnson for the CarseyInstitute, University of New Hampshire, 2006
The terms “rural” and “urban”are used synonymously with “nonmetropolitan” and “metropolitan”.
–USDA routinely
Rural regions, for purposes of this analysis, are geographic areas not part of metropolitan areas as defined by the U.S. government.
–Michael Porter, Harvard Business School, for the EDA, 2004
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
BUT the Majority of Rural People
Live in Metropolitan Counties
75%4,778,09414,651,57419,429,6681,362Non-core
48%15,192,60614,219,69229,412,298690Micropolitan
13%202,389,83930,190,101232,579,9401,089Metropolitan
Rural
%UrbanRuralPopulationn
Type
OMB
Non-metro is not the same as rural, metro is not urban
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Kalamazoo-Portage Metropolitan Area
103,167 rural residents
Kalamazoo County
238,603 population
47,551 rural
1,237 farm
46,314 rural non-farm
Van Buren County
76,263 population
55,616 rural
1,804 farm
53,813 rural non-farm
Paw Paw
11,341 people
Hartford
2,900 peopleSouth Haven
6,632 people
Kalamazoo UA
187,961 people
Richland
3,560 people
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
System III. Rural-Urban Character
Mixed Rural– Not urban, not rural, density less than 320 people per square mile
Mixed Urban– Not urban, not rural, density greater than 320 people per square mile
Rural County1. 90% of the county population in rural areas or
no urban area with a population of 10,000 or more
2. population density less than 500 people per square mile
Urban County1. 90% of the county population in urban areas
2. 50,000 or more residents in an urbanized area or 90% of county population in an urbanized area
3. population density at least 500 people per square mile
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Rural/Urban Type
Rural
Mixed Rural
Mixed Urban
Urban
Rural-Urban Character
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
What is Prosperity, and Do
Prosperous Rural Places Exist?
Rural Eutopia
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Prosperous Places Do Better than the
Nation on Four Criteria
1. Lower unemployment rate (< 5.8%)
2. Lower poverty rate (< 12.4%)
3. Lower high school drop out rate, age 16-19
(< 9.8%)
4. Lower rate of housing units with problems ( <30.5%)
– Crowded
– Lacking complete plumbing
– Lacking complete kitchen
– Monthly cost < 30% of income
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Prosperity Has Regional and
Metropolitan Patterns
Prosperity Scale
4 3 2 1 0
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
An 83 County Michigan Summary, 2000
Criteria Met n Pct Poverty Unempl. Dropout Housing
4 20 24% 20 20 20 20
3 30 36% 29 11 20 30
2 22 27% 9 1 12 22
1 11 13% 0 0 0 11
Character n Pros. Pct. Poverty Unempl. Dropout Housing
Rural 42 4 10% 26 6 26 42
Mixed Rural 31 12 39% 25 19 20 31
Mixed Urban 7 2 29% 5 5 4 7
Urban 3 2 67% 2 2 2 3
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Both Character and Integration Matter
Character OMB n Pros. Pct.
Rural Non-core 34 1 3%
Rural Micro 6 2 33%
Rural Metro 2 1 50%
Mixed Rural Micro 17 6 35%
Mixed Rural Metro 14 6 43%
Mixed Urban Metro 7 2 29%
Urban Metro 3 2 67%
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
How Are Prosperous Rural Places
Different from Those That Are Not
Prosperous?
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Rural Places Petri Dish—
Rural Non-core Counties
Type OMB
n of
Cos. Population
% U.S.
Pop
% U.S.
Area
Den-
sity
Rural
Population
% U.S.
Rural
% Co.
Rural
Rural Non-core 1371 19,842,259 7% 54% 10 14,953,176 25% 75%
Rural Micro 115 1,533,007 1% 2% 21 1,190,748 2% 78%
Rural Metro 304 6,589,186 2% 5% 36 5,134,419 9% 78%
Mixed Rural Micro 555 27,291,697 10% 18% 42 12,706,423 22% 47%
Mixed Rural Metro 467 59,132,936 21% 15% 109 15,971,278 27% 27%
Mixed Urban Non-core 7 44,656 0% 0% 1,089 1,421 0% 3%
Mixed Urban Micro 4 130,347 0% 0% 513 35,105 0% 27%
Mixed Urban Metro 146 40,333,682 14% 3% 442 6,018,827 10% 15%
Urban Metro 172 126,524,136 45% 2% 1,556 3,052,200 5% 2%
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Three Analyses
Mean Differences across Groups, 0-4
Multivariate Probit Regression
Case Study of Persistently Prosperous Counties
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
289 Prosperous Rural Non-core Counties (21% of 1,371)
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Economy: More Private Sector Jobs
Jobs per 1000 People
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Prosperous Have More Education
Per 1000 People
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Rural with a Minority Concentration—
Less than One in 20 Prosperous
8
70
133
273
10
149
666
944
Dutch
Norwegian
English
German
17181Hispanic
198American Indian
6260Black
No. ProsperousNo. CountiesGroup
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Both Region and Race Matter
Michigan 0/4
Baraga, Mackinac
Lake, Oceana
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Probit Regressions
� Two Sets
– All Rural Non-core Counties
– Rural Non-core Counties without Minority
Concentration
� Two Specifications
– Farm and Private Non-farm Employment
– Disaggregated Economic Base
� Blocks of Variables Reflecting Theories
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Farm
Private non-farm employment
Mining
Resource based manufacturing
Footloose manufacturing
Accommodation and food services
All other secondary and tertiary private sector
Federal civilian and military
State and local government
Jobs (per capita)
Probit Regression SummaryYellow = strong relationship
White = sometimes important
Black = not a differentiator
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Other Economy and Human Capital
Industrial diversity: Private non-farm Herfindahl
Government farm payments per farmer ($000s)
High school graduates per 1000 pop age 25+
ERS recast creative class occupations as percent
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Social Capital and Heterogeneity
Social capital establishments per capita
Small manufacturing establishments per capita
Adherents to civically engaged religions per capita
Largest ancestry group as percent of population
Income inequality: Household income Gini)
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Population Change and Composition
Population change 1990-2000, pct
Population in institutional group quarters, pct pop
In-migrants 1995-2000, pct pop
New foreign born residents since 1990, pct pop
African-American or black pop, pct pop
American Indian pop, pct pop
Hispanic or Latino/a, pct pop
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Location and Accessibility
Distance to urban area pop >= 50,000
Dummy: > 9 miles interstate highway in county
Distance to nearest commercial airport
Amenity index: ERS composite scale
Dummy: Hilly or mountainous topography
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Prosperous Rural Places
1. More private sector jobs, particularly post rural-resource economy
2. More educated residents
3. More income equality
4. More shared identity
5. More adherents to civically engaged religions
6. Less distance to metropolitan areas
7. No minority concentrations
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Let’s Get Real: Gardner and Stockville
Two Persistently Prosperous Rural Communities
� Retain anonymity
� Gather data from both to produce one regional story
2000 Data:
1.7 % drop out rate
6.1 % poverty rate
1.9 % unemployment
Gardner
Pop 6,000Stockville
Pop 9,000
City 1Pop 150,000
City 2Pop 80,000
Two counties in the Midwest
41
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Innovative Farmers Have Kept the Agricultural
Economic Base Profitable
Most productive farmers in the state– Pooling resources to invest in new technology
– Institutional and community support for agriculture:� private college does ag research, � Concentrated Animal Feeding Operations are respected
– A complete value chain locally� grain, livestock, milk, eggs, and meat processing� manure contracts and ethanol plants
– Support from state policy� strong state extension program� agriculturally focused state
42
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Local Entrepreneurs Encourage High Wage
Manufacturing Jobs
� Specialization in manufacturing jobs
� Local entrepreneurs have built national and regional companies – Remain in their original communities
– Prefer to hire locally and emphasize training
� Invest in community assets, contribute to decision making processes
– Stockville, most manufacturing is still related to agriculture
– Gardner, rural professional class of professors, managers, and white collar workers
43
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Community Partnerships Build Educational
and Institutional Investments
� For nearly 50 years the region had 3 private colleges
� Private and public K-12 education
� Private individuals have started social organizations to address community problems with a faith based perspective
� Volunteers operate a 5 story county museum from a renovated public high school
� Old hospital reused as a women’s shelter and office buildings
� Closed college turned into a YMCA, conference center, indoor swimming pool, and apartments
44
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Government Entrepreneurships Invest Back into
the Community
� Rural governments own the hospital, affordable housing, nursing home, utilities - gas, water, electricity, cable TV, and internet
� 4 year public campaign built a $30 million hospital with separate daycare and nurses training facilities. – $9 million raised through taxes and donations
� The region has built recreational amenities and other community infrastructure – a process of competition with neighboring communities
� 160 acre farm purchased for an industrial park and airport
45
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Business, School, Church, and Governments Build
Civic Engagement, Pride, and Cohesion
� A family oriented festival attracts 150,000 a year
to a community of 6,000
� Business owners speak about the importance of
faith in the way they do their job
� Government recruits local high school and
college graduates with mailings
– 96% and 74% are religious adherents
– 71% and 45% claim single ancestry
46
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
So What does the Prosperity Lens and
Research Imply for
The Michigan Model?
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
The Michigan Model
Jack Schultz
George Erickcek
Mark Drabenstott
Milan Wall
Ernesto Sirolli
Carole Summers
Christine Hamilton-Pennell
Tom Sander
Luther Snow
Oscar
Rodriquez
Don Macke
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
The Michigan Model
7 ½ Keys
Can Do
Making Firms Young
Innovation
8 Keys:
Reinventing Region
Local Leaders
Enterprise
Facilitation
AgriCultural
Tourism
Economic Gardening
Civic Engagement
Asset-Based
Community
Development
Community
Alumni
Energizing
Entrepreneurs
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
So, a Useful Alternative Way of Looking
at Rural Development?
Rural Distress
Regional Competitiveness
Regional Growth
Rural Advocacy
Regional Coordination
Regional Cooperation
Rural Prosperity
– People oriented
– Community based
– Outcome focused
– Results driven
You stand a
chance
to be happy
You know how
to measure progress
You and your community
know what to do and why
You begin with the end in sight
You know you are doing good
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
I never hear that word anymore: Prosperity. It used to be a synonym for Paradise.
Kurt Vonnegut, Breakfast of Champions, 1973, p. 2
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
Seven Little Pieces
1. Definitions� Prosperity criteria are appropriate policy foci
� Rural is negotiable, and the definition is a choice.
2. Geography� Geography is not destiny
� Physical amenities, interstates, and distances to cities and major airports are relatively unimportant in distinguishing between prosperous and other places.
3. Human Capital and Skills� Education, the most important policy tool
� Urban-centric concepts of skills and creative occupations may need retooling to be rural-relevant and useful
April 22, 2009
Prof. Andrew M. Isserman
University of Illinois
4. Civic engagement� Relationships and values that tie people together matter
5. Economy� Jobs and income distribution matter, too.
6. Race� Color blind is not good enough when the rural legacy of
reservations, slavery, and conquest remain so strong
7. Homogeneity and diversity� It depends…on the group or groups
� Identity can support persistent poverty or persistent prosperity.