Journal
CAMBRIDGE JOURNAL OF REGIONS ECONOMY AND SOCIETY
Volume 1, Issue 1, Pages 131-156Publisher
OXFORD UNIV PRESS
DOI: 10.1093/cjres/rsm005
Keywords
place-based policy; rural poverty; economic development policy; spatial mismatch; rural-urban spillovers
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Unless there are spatial barriers that limit adjustment, economists argue that policies to alleviate poverty should focus on poor people, not poor places. Akin to urban spatial mismatch hypotheses, we develop a distance-based friction explanation of higher rural poverty. Empirical examination of US poverty supports these frictions as partly underlying higher rural poverty. This follows from assessing the relationship between poverty and remoteness as well as labour supply responses. Higher rural poverty does not appear to be a simple result of the poor self-selecting to live in remote areas. The results suggest that place-based anti-poverty policies may be beneficial.
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