Rural Population Growth, 1950-1990: The Roles of Human Capital, Industry Structure and Government Policy

A human capital investment model of migration is applied to data on changes in county working- age populations. Counties having more highly educated populations grew more slowly. While human capital raises rural incomes, this effect is swamped by the higher returns to human capital in urban markets. This leads to "brain drain" from rural areas. Other results include: 1) Populations grow more rapidly in rural counties that have a diversified employment base. 2) Farm population grows faster (or declines more slowly) in counties with relatively high farm income, and nonfarm populations grow faster in counties with relatively high nonfarm income. However 3) there is no evidence of positive spillover income effects across the farm and nonfarm sectors: higher farm incomes lead to slower nonfarm population growth and vice versa. 4) Measured county government services financed by local taxes or debt have neutral or negative effects on population growth.