In a 1996 ERS survey of rural manufacturers, respondents were asked which of 21 local factors created problems for their ability to compete. The list included items related to infrastructure and access to customers and suppliers, but most of the factors reported as major problems by large numbers of respondents involved human capital in one form or another. Given that global competitive pressures have increased since 1996 and many rural manufacturing jobs have been lost, these problems are unlikely to have abated.

Manufacturers in low-poverty outmigration counties cited the quality of labor most often as a major problem, although the proportion citing this problem was significantly smaller (29 percent) than in other nonmetro counties (35 percent). Manufacturers who pay higher wages tend to cite this problem less often, so the issue is in part whether manufacturers can afford to pay for the quality of labor they need. The other major drawback for manufacturers in low-poverty outmigration counties was the low attractiveness of the area to managers and professionals, reported as a major problem by one of every four manufacturers, nearly twice the frequency found in other nonmetro counties. In general, this problem was cited most often in counties where population density, landscape attractiveness, and educational attainment are low. The first two conditions are typical of the low-poverty outmigration counties.

Human capital was the overwhelming issue for manufacturers in high-poverty outmigration counties. The quality of local schools was cited as a major problem by 41 percent of the manufacturers, followed by the quality of available labor, the area’s attractiveness to managers and professionals, and access to training courses. While they result in a low-skilled local labor force, poor quality schools can also create difficulties in finding upper-level employees. About 85 percent of the manufacturers in the high-poverty outmigration counties who reported low area attractiveness to managers and professionals as a major problem also cited poor local school quality as a major problem.

Jobs help, but reducing net outmigration is also about attracting people

Much attention given to stemming outmigration focuses on job creation, particularly through local entrepreneurship. While certainly relevant, particularly in the current economy, it is not clear that job creation itself addresses the basic drivers of high net outmigration. In most high-poverty outmigration counties, the basic problem appears to be poor schools. Poor schools lead to an underskilled labor force and discourage potential high-skill inmigrants concerned about their children’s schooling. The fact that manufacturers in these counties frequently reported the attractiveness of the area to managers and professionals as a major problem suggests that these counties are unlikely to attract talented entrepreneurs as new or return migrants. Schooling is not typically a rural development issue, but it is difficult to see how sustained growth in high-poverty outmigration counties could be achieved without attention to local education systems.

In the low-poverty outmigration counties, schools are not an issue. Indeed, their good schools are likely a major reason that so many young adults are able to leave these counties for further education and employment elsewhere. Compared with other nonmetro counties, these outmigration counties are typically more remote from large urban areas, more thinly settled, and more lacking in the ingredients of attractive landscapes.

USDA has a long history of redressing problems of remoteness and small size, most notably with the formation of rural electric cooperatives and rural telephone services. A current concern, expressed in the Department’s 2010-2015 Strategic Plan, is to ensure that rural populations have access to affordable broadband. ERS researchers have found that counties with early broadband accessibility grew more than similar counties without such accessibility (see “Broadband Internet Service Helping Create a Rural Digital Economy” in the September 2009 issue of Amber Waves). Other initiatives include long-distance learning and telemedicine (see also “Taking the Pulse of Rural Health Care” in the same issue).

The rural outdoors is an important rural development asset, attracting not only tourists and second-home owners, but also people seeking an attractive environment in which to raise a family, switch from hectic urban careers, or retire. While the concept of “ecosystem services” is usually applied to benefits such as clean water, carbon sequestration, or pollination of crops by bees, it extends to the enjoyment of nature by visitors and residents. USDA’s largest environmental improvement effort, the Conservation Reserve Program (CRP) pays farm owners to retire environmentally sensitive land from production. In 2002, an average of 2.5 percent of nonmetro county land was enrolled in the CRP, with larger shares in the outmigration areas in the center of the country. Eligibility is based on benefits to air and water quality, reduction in soil erosion, wildlife habitat provision, and enduring benefits, such as the planting of trees.

Although no explicit attention is currently given to rural development impacts, CRP lands appear to be generating economic benefits by increasing recreation—most likely through improved wildlife habitat. This recognition has induced a number of states to initiate programs to supplement CRP payments for farmers who allow public access to their land for recreation—often with hunting and fishing in mind. A new USDA Voluntary Public Access and Habitat Incentive Program supports these State initiatives. These and other extensions may serve to reduce the difficulty in attracting both return migrants and new residents to an area by enhancing its appeal as a place to live and work.