Residential Variation in Poverty during the Transition to Adulthood in the United States: An Analysis of Panel Data

Paul Berry, Cornell University

In the wake of the Great Recession, a great deal of attention has focused on the dearth of opportunities presently available for young adults transitioning into the workforce; however, little concrete analysis exists regarding how the prevalence of poverty among young adults has shifted within a longer historical time frame and across the rural-urban divide. Using PSID data, this paper uses the Cox proportional hazard model to examine rural-urban variation in the probability of experiencing a year of poverty between the ages 25-30 in reference to a number of covariates. Results indicate that, while poverty is unevenly distributed across rural and urban areas, residence is not a significant predictor of poverty when historical context, family background, and individual level characteristics are taken into account. Family socio-economic status (measured as average family income from age 12-16), individual education, and service-sector occupation are found to be the most significant predictors of poverty.