The first challenge of discussing US rural areas is to define them. I remember once reading a poetic definition that a rural area is a place where the shape of the land matters. But the US Census takes a different approach. It classifies each of the 3,141 counties in the United States as metropolitan, micropolitan, or neither. The “neither” category does not have an urban area of at least 10,000 people and is not in the commuting area of a nearby larger city. The “micropolitan” counties have an urban core of between 10,000 and 50,000 in population, and are not in the commuting area of a larger urban area. The most common way for research to look at “rural” America is to combine these these two categories of “nonmetropolitan” counties. Using this definition, rural areas are 97% of the land in the US, where 14% of the population lives. Rural areas also tend, with some exceptions, to be places where incomes are low, and where there have been many efforts over the decades to encourage economic development. Alexandra E. Hill, Sarah A. Low, and Keith Taylor explore the topic in “The Economics of Rural Development in the United States” (Annual Review of Resource Economics, 2026, pp. 11-39).
As one starting point, it’s important to recognize that the economy of rural America is not primarily agricultural, and has not been so for some time. Hill, Low, and Taylor write:
Today’s rural America contributes to the national economy through a range of industries. The USDA estimates that, with regard to jobs and earnings, 17% of nonmetro US counties are classified as farm-dependent, 25% are manufacturing, 10% are recreation, 4% are mining, 4% are the government sector, and the remaining 40% do not have a primary industry (USDA ERS 2025). While small family farms still constitute the majority of US farming operations (85%), they are becoming less prevalent, accounting for only 14% of farm sales (USDA NASS 2025). Among rural households engaged in production agriculture, reliance on nonfarm income and benefits, such as health insurance, has never been higher: In 2017, 82% of farm household income came from off-farm sources, and 56% of principal farm operators had a main job off the farm (Spell et al. 2022). Recognizing this, many agricultural economists now argue against the Goldschmidt Hypothesis, which suggested that improving the farm economy is necessary and sufficient for improving rural economies, and instead advocate for policies that more broadly stimulate prosperity, health, quality of life, and economic diversification in rural communities … Nonmetro US counties have experienced lower employment growth than metro counties over the last two decades (Dumont 2024, Sanders 2022). Multiple factors contribute to this, including falling population levels, fewer employer businesses and rising numbers of nonemployee businesses (Conroy et al. 2025), growth in high-skilled and declines in low-skilled employment opportunities (Autor 2019), and more …
Painting a comprehensive picture of rural America also requires understanding the people who fill jobs in, reside in, and contribute to rural communities. Today’s rural America is increasingly diverse in terms of race and ethnicity. According to the most recent decennial census (from 2020), 24% of rural Americans are “people of color” (versus 20.2% in 2010), and their distribution across rural America is heterogeneous: In the rural South, the largest nonwhite group is mostly Black, whereas in the rural North, these groups include American Indian, Latino, and Asian …
A common perception of rural America is that of widespread poverty. While most sources agree that rural household incomes are, on average, lower than urban incomes (Shrider et al. 2021), the share of rural households with incomes below standard poverty thresholds has declined. In fact, over the last 60 years, the rural-urban poverty gap has narrowed. In 1960, the average poverty rate across nonmetro counties was roughly 32%, 17 percentage points higher than the 2019 rate (15%). As of 2019, the poverty rate gap between metro and nonmetro US counties is only 3.5 percentage points, whereas it was 17% in 1960
Of course, a laissez-faire public policy strategy for rural areas would be to assist the poor, and otherwise just accept that people have different preferences for living in different places, with different mixtures of economic opportunity, and leave it at that. The efforts that have been made to support economic development in rural areas basically fall into two categories: place-based and people-based. Place-based policies focus on attracting businesses and industrial clusters to rural areas, as well as encouraging local entrepreneurs, through investment in infrastructure and amenities, as well as financial incentives. People-based policies focus on education and skill development. Obviously, the two types of policies can interact and support each other.
Hill, Low, and Taylor point out that there seem to be new economic opportunities for rural counties with the spread of remote work and only occasional commuting, and that there are potential payoffs to investing in communication and transportation infrastruture, as well as education and health care, in rural areas. Such recommendations are sensible enough, but it seems fair to say that similar efforts in the past have had mixed results. A key question is how to build stronger and lasting connections from nonmetropolitan areas to the rest of the US economy.
