Academic journal article Journal of Rural Social Sciences

On Rural-Urban Differences in Human Capital Formation: Finding the 'Bottlenecks'*

Academic journal article Journal of Rural Social Sciences

On Rural-Urban Differences in Human Capital Formation: Finding the 'Bottlenecks'*

Article excerpt


Studies have found lower levels of educational achievement for students in rural areas focusing mostly on cross-sectional data. Using the 1997 National Longitudinal Survey of Youth, we follow the same youth cohort to examine whether there are metro-nonmetro gaps in high cognitive achievement, high school graduation, college readiness, degree attainment, and earnings. We find that gaps emerge early in life and they remain constant through high school. In addition, results suggest that rural students graduate from high school at the same rate as their urban counterparts, but they fall behind when it comes to college graduation rates. Growing up in a rural area does not seem to impose a wage penalty beyond the lower earnings operating through cognitive test performance and college degree attainment.

Whether nonmetro youth face unique disadvantages in terms of human capital formation remains open to discussion (e.g., Reeves 2012). Recent estimates on adults residing in nonmetro areas show a clear gap in formal education. From 2006 to 2010, 17.5 percent of nonmetro adults had no high school diploma (compared with 14.4 percent of metro adults) and 17.5 percent had at least a college degree (compared with 30 percent of metro adults) (USDA 2012).1 Overall, nonmetro human capital gaps can persist either through disproportionate migration of more productive youth or lower human capital formation among incumbent nonmetro youth, accrued at any point in their lives.2

This study focuses on the timing of metro-nonmetro differences in human capital within the life of a nationally representative cohort of youth followed from age 12 to 30, using long-term panel data from the National Longitudinal Survey of Youth (1997) (NLSY97; Bureau of Labor Statistics 2012). We track the size of metro-nonmetro gaps in several educational outcomes among youth as they go through important life stages, examine how accumulated education and cognitive skill relate to migration decisions, and explore the labor market consequences of nonmetro human capital gaps. Specifically, we ask: 1) At which point in their lives do nonmetro and metro youth start to look statistically different in terms of cognitive skills and completed schooling?; 2) What happens to gaps in these outcomes as youth go through important life stages (before and during high school, college, and work force)?; 3) How do migration choices of nonmetro youth relate to education and cognitive skill?; and 4) What is the net effect that educational outcome gaps have on adult wages?

We use the conceptual framework of Roscigno and Crowley (2001) as a starting point, and extend it to highlight the temporal aspects of human capital formation. Roscigno and Crowley (2001) pointed out that the interaction of labor markets, family resources, and migration patterns may result not only in a concentration of resource-constrained households in nonmetro areas, but also a lower propensity to invest out of a given resource base. This highlights the importance of distinguishing between resources and investments, in both the private and public sectors, when considering metro-nonmetro human capital gaps.

Empirically, many studies have used the framework of Roscigno and Crowley (2001) with cross-sectional or short panel data on youth of different ages to examine the relative role of resources and investments (public and private) in explaining metro-nonmetro gaps in educational outcomes at a given point in time (e.g., Byun, Meece, and Irvin 2012; Durham and Smith 2006).

We complement the current literature by exploiting long-term panel data to pinpoint when metro-nonmetro differences start emerging, how these gaps evolve over time, and their relationship to migration decisions and adult wages. Our approach will provide information on the relative merits of age-specific interventions focusing less on explaining metro-nonmetro educational gaps for any particular age group and more on measuring their progression over the lives of a nationally representative cohort of youth as they age from 12 to 30 years old. …

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