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Structural change and the aggregate poverty rate.

D R Williams1

  • 1Kent State University, Department of Economics, OH 44242.

Demography
|May 1, 1991
PubMed
Summary
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Recent poverty rate increases stem mainly from declining employment and rising poverty within industries, not shifts in job distribution. Service sector growth did not worsen poverty incidence in the United States.

Area of Science:

  • Economics
  • Sociology
  • Labor Market Analysis

Background:

  • Aggregate poverty rates have shown recent increases.
  • Understanding the drivers of poverty is crucial for effective policy.
  • The role of employment distribution in poverty dynamics requires examination.

Purpose of the Study:

  • To measure the contribution of changing industry employment distribution to aggregate poverty rate increases.
  • To decompose poverty rate changes into components related to employment shifts and within-industry poverty incidence.
  • To analyze the specific impact of service sector employment growth on poverty.

Main Methods:

  • Decomposition analysis of poverty rate changes over the 1976-1983 period.
  • Separating the effects of changes in employment shares across industries.

Related Experiment Videos

  • Analyzing changes in the incidence of poverty within specific industries.

    • Main Results:

    • The primary driver of increased poverty rates was a general decline in employment rates.
    • Rising poverty incidence within all industries significantly contributed to the overall increase.
    • Shifts in employment opportunities between sectors were not the main cause of increased poverty.
    • Growth in the service sector did not correlate with increased poverty incidence.

    Conclusions:

    • Policy interventions should focus on improving general employment rates and addressing within-industry poverty factors.
    • The structural shift towards the service sector has not exacerbated poverty in the United States.
    • Further research can explore other determinants of poverty beyond employment distribution.