The Concentration of Poverty within Metropolitan Areas

By Aliprantis, Dionissi; Fee, Kyle et al. | Economic Commentary (Cleveland), January 31, 2013 | Go to article overview

The Concentration of Poverty within Metropolitan Areas


Aliprantis, Dionissi, Fee, Kyle, Oliver, Nelson, Economic Commentary (Cleveland)


Not only has poverty recently increased in the United States, it has also become more concentrated. This Commentary documents changes in the concentration of poverty in metropolitan areas over the last decade. The analysis shows that the concentration of poverty tends to be highest in northern cities, and that wherever overall poverty or unemployment rates went up the most over the course of the decade, the concentration of poverty tended to increase there as well.

Over the course of the last decade, the poverty rate in the United States rose from 11.3 percent to 15.0 percent. From a geographic perspective, the increase has been widespread, as 49 out of the 50 states have seen a rise in poverty rates from 1999 to 2011. Clearly, this rise in poverty is linked closely to economic conditions, with many families and individuals seeing declining incomes during the Great Recession. The manufacturing states of the Midwest saw particularly sharp increases in poverty rates over this time period.

At the same time that the overall level of poverty was rising in the United States, the concentration of poverty was also increasing. While poverty tended to increase in all neighborhoods, this increase was most rapid in neighborhoods that already had a large share of poor residents. This increase in the concentration of poverty is a distinct cause for concern because the disadvantages to an individual from being poor are thought to be either muted or amplified depending on the poverty in their neighborhood. Neighborhoods with many poor residents typically have less access to job opportunities, face higher crime rates, and incur a range of other social problems.

This Commentary documents changes in the concentration of poverty that have occurred over the last decade, focusing on changes within metropolitan areas in the United States. The analysis shows that metropolitan areas with the greatest concentration of poverty are northern cities, and that an increased poverty or unemployment rate at the metro-level implies a larger increase in the neighborhood poverty rates of the poor than of the nonpoor.

Measuring the Concentration of Poverty

The official poverty measure of the U.S. Census Bureau is defined at the family level in terms of absolute income thresholds. In 2010, for example, the U.S. Census Bureau defined the poverty threshold to be $22,113 for a family of four with two children. If such a family's total income was less than this threshold, then that family and every individual in it was considered to be in poverty. The official poverty measure was created to reflect the level of income below which families lack the resources necessary to provide the food, shelter, and clothing needed for healthy living.1

Based on this poverty definition for a family, all individuals in the United States can be identified as being poor or nonpoor. Then for any geographic area- a neighborhood, city, or metropolitan area- the share of the population that lives in poverty can be constructed. In our analysis, two levels of geography are employed, the neighborhood and the metropolitan area. The poverty rate for a neighborhood is simply the share of individuals who live below the poverty line in a census tract. A census tract typically contains around 4,000 residents. The metropolitan area then is made up of a collection of neighborhoods (census tracts) that are within the same broad labor market. For example, the Cleveland metropolitan area contains 636 such census tracts.

Whether poverty is concentrated or dispersed depends on how poor individuals are distributed across a region. Suppose a small metropolitan area had 10 neighborhoods with 4,000 residents in each neighborhood and a total of 4,000 people living in poverty. This metro area would have a poverty rate of 10 percent ((4,000 - 40,000) x 100%). If all the poor lived in one neighborhood, this would reflect the most extreme form of concentration, as the poor neighborhood would have a poverty rate of 100 percent and all the other neighborhoods in the region would have a poverty rate of 0 percent. …

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