Research 02/06/2020

The Rural Challenge: Depopulation and Its Economic Consequences

A new Forward Analytics report, The Rural Challenge: Depopulation and Its Economic Consequences, found that from 2010-2018, two thirds of rural counties in Wisconsin lost population. That percentage was up from 44% during 2000-10, and in rural counties across the nation, a similar pattern has emerged.

“The pattern of rural counties growing more slowly than urban ones has a long history,” said Forward Analytics Director Dale Knapp, “but what is occurring now is the slow rural growth of the past is turning to decline.” 

According to the new report, 30% of rural counties nationally and none in Wisconsin experienced population loss during 1990-2000. Over the ensuing 10 years, those percentages climbed to 47% nationally and 44% in Wisconsin. Since 2010, a full two-thirds of rural America has experienced depopulation, with few signs that this will abate any time soon.

“The economic consequences of depopulation are real – a shrinking workforce, fewer jobs, fewer businesses, and slower income growth,” said Knapp. “Among the 10% of counties with the fastest population growth during 2010-2018, median growth in the labor force was 5%, in jobs 13.1%, and in businesses 8.5%.” 

That stands in stark contrast to the 10% of counties with the largest population losses, where median decline in workforce was 14.1%, in jobs 3.9%, and in businesses 5.5%. For counties between these two extremes, growth rates fell as population growth weakened.

Depopulation generally resulted in slower income growth as well. Among counties growing the fastest, median county income growth was over 24%. Among those with the greatest population declines, median income dropped 0.8%. With population falling along with economic activity, there appeared to be little impact on per capita income and household income.

“The good news for our state is that while its rural counties are experiencing population loss, the declines are generally not as severe as elsewhere,” said Knapp. “The state had 11 counties among the top 30% nationally in population change and only one among the bottom 30%.”

According to Knapp, among four measures of economic performance, rural counties in Wisconsin generally outperformed their counterparts nationally. In labor force growth, Wisconsin had 20 counties among the top 30% nationally, nine more than it had on population growth. In business growth, 22 rural Wisconsin counties were among the top 30%, and in income growth, the state placed 17 at that level.

The one indicator where the state lagged was job growth. Only six rural Wisconsin counties were among the top 30% nationally.

Knapp concluded, “While rural depopulation in the state has not been as severe as elsewhere, policymakers should not be complacent. There are few signs that this trend will slow or reverse, and Wisconsin’s experience could worsen over the next decade.”

Read the full report, The Rural Challenge: Depopulation and Its Economic Consequences, here.