Rural Income, Poverty, and Welfare:
Rural Welfare

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Of the $1.1 trillion in Federal, State, and local government transfers to individuals in 2001, $214 billion went to nonmetro residents and $897 billion went to metro residents. On a per capita basis, nonmetro residents got more transfers than metro residents, $4,375 vs. $3,798. With per capital income of $22,391 in nonmetro areas and $32,077 in metro areas, government transfers account for 20 percent of nonmetro and 12 percent of metro income. The share of transfers from various programs was about the same in nonmetro and metro areas. About 40 percent went to retirees and the disabled as payments from Social Security and government pensions. Another 40 percent was payments for medical services and supplies covered by Medicare, Medicaid/SCHIP (SCHIP are State programs providing health insurance coverage for low-income children), and the medical insurance program for dependents of military personnel (CHAMPUS). About 10 percent of transfers was income maintenance program benefits paid to qualifying families and individuals, for example, food stamps and family assistance (formerly Aid to Families with Dependent Children [AFDC] and now variously named State programs under the Federal block grant program called Temporary Assistance for Needy Families [TANF]). Unemployment insurance, veterans' benefits, and other miscellaneous programs accounted for the rest of transfers.

Transfer payments by residence, 2001
			Nonmetro							Metro
			Amount per capita		Share of transfers1		Change, 1997-2001			Amount per capita		Share of transfers1		Change, 1997-2001
			Dollars		-------Percent-------					Dollars		-------Percent-------
Transfer payments			4,375		100.0		19.0			3,798		100.0		15.5
	Retirement/disability		1,867		42.7		15.6			1,517		39.9		12.9
		Social Security	1,781		40.7		16.5			1,430		37.6		13.4
	Medical		1,791		40.9		23.7			1,642		43.2		19.0
		Medicare	885		20.2		11.2			828		21.8		8.8
		Medicaid/SCHIP	899		20.5		39.5			807		21.2		31.9
	Income maintenance		417		9.5		9.2			383		10.1		4.9
		Supplemental Security Income	124		2.8		7.0			115		3.0		9.1
		TANF	42		1.0		0.4			73		1.9		3.8
		Food stamps	70		1.6		-6.3			53		1.4		-21.1
		Other income maintenance	182		4.1		21.2			142		3.7		16.3
	Unemployment insurance		120		2.7		52.2			112		3.0		52.7
	Veterans’ benefits		120		2.7		16.5			87		2.3		13.2
	Other transfer programs		60		1.4		19.7			57		1.5		18.3
1/ Percentages shown for the major categories sum to 100. Subcategory percentages may not sum to the major category values because only selected subcategory programs are shown.
Source: Calculated by ERS using data from the Bureau of Economic Analysis.

Increases in per capita transfers between 1997 and 2001 were most striking in medical benefits and unemployment insurance payments. In 1997 Congress passed legislation that allows States to provide health insurance to more children in working families. That initiative undoubtedly explains much of the steady growth in per capita Medicaid/SCHIP transfers in both metro and nonmetro areas since then. The downturn in jobs during the 2001 recession pushed more laid-off and terminated workers onto unemployment insurance rolls, explaining the abrupt rise in per capita unemployment insurance transfers between 2000 and 2001 in nonmetro and metro areas.

Download the data for this chart in Excel format. What is micropolitan?

The food stamp program was the only program with lower per capita transfers in 2001 than in 1997. Although food stamps are still well below their 1997 per capita level, especially in metro areas, benefits turned up between 2000 and 2001. Research has shown that the food stamp program is counter-cyclical, so increases in food stamp benefits in a recession year are to be expected.