This paper examines changes in the earnings distribution of men age 25-64 between 1960 and 2000 in Appalachia and in the remainder of the U.S. Because Appalachia is more rural than the remainder of the U.S. we also examine changes in the earnings distribution in rural vs. urban areas. Our central finding is that there have been large differences in the evolution of the earnings distribution in rural vs. urban areas and this is the principal reason that Appalachia’s earnings distribution differs to some degree from the remainder of the U.S. We find that the bottom of the earnings distribution increased in rural counties between 1960 and 1980 while there was a small decrease in the bottom of the earnings distribution in urban areas. Between 1980 and 2000, urban areas exhibited far more bifurcation of earnings than rural areas. The level and the return to education may play an important role in understanding these patterns. At the bottom of the distribution there was a large increase in education in rural areas relative to urban areas between 1980 and 2000. The relative rise at the top of the earnings distribution in cities is likely caused by men in the upper part of the earnings distribution being much more likely to have a college degree combined with a rapid rise in the return to college education.
Discussion Paper Number
Black, Dan and Sanders, Seth, "Inequality and Human Capital in Appalachia: 1960-2000" (2009). University of Kentucky Center for Poverty Research Discussion Paper Series. 61.