Rural communities have not received many of the benefits that economic assistance programs provide for low-income families. In the United States, poverty tends to disproportionately affect rural communities more so than urban communities, with generational and insular poverty creating a cyclical nature that traps people for prolonged periods of time. However, the government has determined that a possible avenue to break up this phenomenon is to promote self-sufficiency for families to escape economic hardship and reach prosperity. The Temporary Assistance for Needy Families (TANF) program intends to provide cash assistance for recipients in return for their active search for employment. Due to structural conditions and barriers to social mobility, rural communities are not receiving TANF to the same degree as urban communities.

Rural communities often experience several economic factors that inhibit their ability to achieve economic security, especially in comparison to urban areas. Rural communities tend to have lack public transportation options; a variety of child care options; high degrees of food insecurity; stagnant wages; limited access to government services; little technological capacity; and lower health insurance coverage. And poverty is inherently intertwined with all these factors. The official national poverty rate comes in at around 14%, but in examining how rural and urban communities compare, rural communities experience much higher poverty rates. The figure presented to the below shows the geographical spread

of poverty in the United States, where clear patterns of rural areas in the American South, in Appalachia, and on Native American reservations. Some areas demonstrate poverty rates that are double or triple the national average. This attests to the insular poverty theory, which proposes that certain areas of the United States have higher poverty rates because of their large geographic isolation that separates them from the rest of America. Poverty’s economic and social effects demand America’s attention as the U.S. experiences fiscal costs of $500 billion each year, which equates to roughly 4 percent of GDP.

The federal government has assumed the de facto role of alleviating poverty in communities around the United States. Policy-makers have instituted economic assistance programs that aim to reduce health disparities, food insecurity, and unemployment assistance. However, TANF operates much differently. TANF’s goals are to secure stable, full-time employment for recipients who seek benefits and provides cash assistance as a means to reach it. Because recipients must verify their employment and limited access to government offices, it is difficult for rural individuals to participate in the program. States receive block grants to provide assistance to families, which can be used to support cash assistance, child care, job training, and other services. States also have the ability to determine eligibility as well as the sanctions for breaking the rules of the program.

Using data between 2015 and 2017 for 13 states, the relationship between rural communities and TANF recipiency can be explored. After inserting other factors that influence TANF recipiency, such as income, unemployment, and demographics, there seems to be a significant relationship that confirms more rural communities tend to have fewer TANF recipients. Many explanations describe this phenomenon. Some studies argue that rural areas may hold more negative stereotypes around accepting welfare, which may be derived from small social networks that exist in these communities. In addition, many factors involving the coverage and generosity of the program undoubtedly affect its uptake. States with more rural communities may receive lower benefits as a result of lower costs of living, and they may face more eligibility issues with limited job opportunities and training in comparison to urban communities.

There is sufficient evidence to believe that rural communities have less TANF uptake than urban areas. The austere environment of social and economic hardship for rural communities makes it harder to receive TANF funding and thus to escape poverty. Not only are there disparities in the areas that endure poverty, but federal welfare-for-work programs such as TANF are ineffectively reaching rural areas. States must devise new approaches to administering the program, especially in regard to rural communities, which experience significant challenges to access and usage of welfare programs. Further investment into human development programs and educational opportunities would also benefit rural communities, which allow for further mobility to escape poverty.

New suggestions for other federal welfare programs, such as SNAP, to include work requirements have faced much debate. Most debates revolve around their disproportionate effects on the elderly, on the disabled, and on people of color. However, as we’ve seen with TANF, work requirements and other components part of TANF, have also disproportionately harmed rural communities. Changes to other welfare programs may have similar effects on rural communities.

As we know, Donald Trump won Rural America. He played on fear but also offered hope – i.e. bringing back coal and manufacturing. Things that many of us know will never happen given the state of energy markets and the global economy.

So what do we do? Rural America has the highest poverty rates. More people are leaving Rural America than moving to it. The share of the population age 65 and older is growing as young people leave for greater opportunities in urban areas.

How do we retain and attract residents to rural America then?

Well, old school economic development posits that people follow jobs. That’s it. Create jobs and your economy will grow. But it doesn’t really work that way now…People are heavily influenced by place and the amenities and attractions an area offers.

In fact, a 2016 report from the Center for Business and Economic Research at Ball State University compared 1970s data and the 2000s. Yes, in the 1970s population growth followed employment growth, but in the early 2000s, in the state of Indiana, data indicated that relationship had ceased. However, their analysis shows that the effect of jobs following people did play a statistically significant role in county population growth. Their findings are consistent with over 25 published works. To be concise, people choose location and jobs follow.

One solution that has been pushed is place-based policy, which is centered around a concept called quality of place. Quality of place essentially operates as what unique qualities attract people to a place. Richard Florida, the famous urban scholar, coined the term in the early 2000s to describe why people – specifically young, educated people – choose to live somewhere.

Think about it like this. I’m moving to Louisville, Kentucky this June after I graduate from IU. Yes, I’m moving there because I have a job, but the reason I applied to the job in the first place was because of its location. I’m from the South originally, and Louisville is near my family’s home in Nashville, TN. But, it also has the Midwestern vibe that I’ve learned to love thanks to IU. Plus, they have some super cool things happening with bourbon and plenty of brew pubs and distilleries and other young professionals. And, it’s warm and close to my favorite outdoor climbing spot, Red River Gorge. Weather, regional location, brew pubs, outdoor recreation – all elements of quality of place.

Enter local economic development organizations (LDOs henceforth). LDOs emerged in the 1970s – predominately in the Midwest – to chase smokestacks – big, outside businesses predominately engaged in fields like manufacturing (hence smoke). They were built to operate on the notion that people follow jobs period, which we know is largely ineffective now. In the beginning, they were not created to attract people through efforts like place-based policy.

Let me give you some context – specific to rural America. LDOs in Rural America play an outsized role in economic development. They are the only professional organization working on economic development because rural government capacity is really limited. In rural Indiana counties, which are not unlike the rest of Rural America, there is often not a mayor and the governing body is part-time commissioners. The counties don’t have a parks department and many areas don’t have zoning. Those, who do government work, take on many roles like the building inspector also serving as animal control (yes, that’s real).

So, LDOs have their work cut out for them. But, what are they doing to foster economic development and attract people?

Well, based on the little available literature, they focus on business attraction – chasing smokestacks – and business retention and expansion. Business attraction, of course, is chasing smokestacks and is largely futile as shown by extensive statistical analysis. Business retention and expansion for local businesses is an important function though. But, do they go beyond this? Have they diversified their focus in recent years? Do they still have a predominant focus on business attraction? How do they interact with quality of place?

That’s what I sought to explore.

And what did I find?

Well, I looked at eight LDOs in Southwest Central Indiana, also known as the Indiana Uplands. I found that the majority (6/8) identified business retention and expansion as their primary mission, and half asserted that business attraction was a large part of their purpose. Only two claimed that quality of place and/or place-based policy as part of their mission. Three stated that workforce development is one of their active strategies.

What does this mean?

Traditional economic strategies – business retention, expansion, and attraction – still reign. But, it appears that rural LDOs may be expanding beyond traditional activities and diversifying their focus – with an emphasis on attracting and retaining people. Quality of place and workforce development are both emerging strategies.

How to move forward?

A couple of things. Rural LDOs can engage in small-scale, tactical urbanism activities such as:

• Launching an initiative with a local arts group to provide technical expertise for small-scale, placemaking projects such as crosswalk paintings, painted pianos, and other low-cost engagement techniques.
• Applying for a small grant to create outdoor cafes. Launching an outdoor Wi-Fi network for a downtown area essentially creates outdoor cafes by allowing residents to work outside.
• Posting wayfinding signage in the downtown area in order to enhance pedestrian focus and foster commercial development.

They can also diversify their activities beyond business retention, expansion, and attraction by:

• Young adult entrepreneur assistance
• Specialized recruitment of candidates for businesses
• Grant assistance to community organizations and efforts

In conclusion, Rural America is losing people and aging rapidly. One mechanism to combat these trends is LDOs. LDOs have predominately focused on traditional economic development activities, but may starting to diversify their approach to focus on attracting people through workforce development and place-based polices.

*All of these suggested policies and activities have been conducted by other LDOs and economic development organizations including the Lansing Economic Area Partnership, Revitalizing Waterbury, Otsego Economic Development Corporation, and Brattleboro Development Credit Corporation.

“What comes first, jobs or people?” article can be found here.

Much is known about the relationship between millennials and civic participation. Much is known about the relationship between millennials and their consumption of political entertainment. But little is known about linking millennial political consumption and their civic engagement. This research explores the relationship between the two by conducting focus groups of seniors at Indiana University. Simplicity and convenience of this program entice millennials to consume it for entertainment purposes. However, through emotions of empathy and rage, respondents felt motivated to engage civically in whichever way they personally felt their voice was heard loudest.

Introduction

When this study mentions ‘millennials’, it is referring to anyone born between the years of 1981 and 1997. ‘Political entertainment’ captures the entertainment including network and cable news magazine shows, entertainment and tabloid news magazine shows, and day time and late-night talk shows that all discuss politics in either an entertaining or humorous manner. And finally, ‘civic engagement’ means working to make a difference in the civic life of one’s community in both political and non-political ways.

Millennials are engaging with civics in a new, arguably redefined way. This is because, as Zuckerman observed, millennials have an interest, or possibly a need, for “participants to see the impact of the issues they are trying to influence.” They do not see that impact with voting, as government seems ineffective to them. So while millennial voting rates are low, millennials are, according to Harvard, just as likely as prior generations to boycott and sign either an online or a paper petition. Additionally, millennial volunteer levels are much higher than that of their parents. Match all of this with an unprecedented millennial relationship with media and social media has become a driver in this new version of civics.

From the literature, Niemi, Craig, Mattei demonstrated that ‘internal political efficacy’ or a “belief in one’s own competence to understand and to participate effectively in politics” can “stimulate political participation.” Consumption of these political comedy-focused programs has, on one hand, left viewers with less trust in both the media and the electoral system. But Hoffman and Young found that said consumption has also been found to lead to increased perceived internal political efficacy, even if trust in the government is lower. The literature does not specify this relationship in the context of millennials though.

The question becomes: How does millennials’ unique relationship with political entertainment inform/affect their redefinitions of civic engagement?

Methods

Three focus groups of Indiana University seniors (born 1996/97) were conducted. The groups were divided by interest so as to observe responses based on increased experience with either civics or with comedy: one was comprised of participants involved in college comedy groups; one was comprised of public affairs majors; and one was a mixed group with various majors and interests. The study sought to test these hypotheses:

H1: Political entertainment improves the amount of efficacy respondents have (how much information participants feel as though they know about politics).

H2: The ability of political entertainment shows to cover topics relevant to millennials sparks efficacy in participants that will lead to them increasing their levels of civic engagement.

H3: The level of emotion participants feel as a result of viewing political entertainment influences the ways in which the subsequently engage civically.

Results

H1: Respondents felt as though they glean information from political entertainment when it delves into a topic of interest to respondents that traditional news media does not cover and when the way it communicates an issue is so humorous that the respondents are inclined to keep watching. The intention of consuming this programming is rarely to learn, because respondents feel inundated with information and news. This programming is, more than anything, comforting and does create a perceived community.

H2: Respondents noted the ability of these shows to emphasize topics that are more relevant to their values and interests, such as gender equality and student debt. This facet of political entertainment left respondents feeling more informed, and subsequently more likely to converse with their peers about the information, and more likely to seek civic engagement such a petitions or social media sharing that surrounded these topics.

H3: Emotion was a definite driver in civic engagement after consuming political entertainment. Empathy for one’s family and friends, or even for an ‘imagined community’ a consumer was exposed to led respondents to discuss donating money, starting petitions, and contacting representatives. Feelings of rage led respondents to discuss social media arguments and voting ineffective leaders out of office. In both cases, invoked emotion did drive subsequent civic engagement for respondents.

Conclusions/Implications

A primary conclusion from this research is that just because millennials are more connected than ever, they are no less self-interested than other generations are. This is both a fact of human nature and a fact of politics: people respond when something threatens them or those they care about. The way that respondents choose the way to engage civically as a result of these feelings is where they think their voice will be heard the loudest. For some, that means donating money. For others, that means sharing things on their Facebook feed.

However, engagement ruled by emotion among a group of people who are inundated with information, and rely on humor or catchy graphics to highlight for them what is important, explains the importance that political entertainment might play in the future. The millennial need for a way to sort through and pull out importance from all of the information they receive should not be underestimated. Future studies would benefit from taking samples of differing educational, racial, and socioeconomic background. Beyond the constraints of this study though, future research in this field could examine whether rage or empathy motivate civic actions more, or identify what types of civic engagement are the most convenient for millennials.

Bio

Carmen Carigan is a graduating senior at Indiana University. Hailing from Cincinnati, Ohio, Carigan majors in Law and Public Policy with certificates in Applied Research & Inquiry and Journalism. When she is not trying to marry her dual passions for mass communication and civics, Carmen is a member of a sketch comedy group, writes an opinion column for the Indiana Daily Student, and is trying and failing to become fluent in Spanish.

Analysis of Chinese Foreign Direct Investment Suggest Economic and Political Returns in Line with Beijing’s Stated Goals

The Belt and Road Initiative is intended to increase connectivity from China to both developing and developed nations — in Asia, the Middle East, and Eastern Europe. From 2014 onward, the Belt and Road Initiative (BRI) has invested $340 billion USD over 60 countries, in a series of investments compared to the Marshall Plan. Over the past years, the trajectory of the Belt and Road Initiative has garnered significant attention from both the media and academics. As an ongoing strategic policy from China, the Belt and Road Initiative raises important questions on what the desired outcomes are for China and whether the current trajectory of the projects included in the BRI match Beijing’s goals. The research conducted in conjunction with this blog post assesses the returns to China primarily in the form of economic trade following the implementation of the Belt and Road Initiative. Speculation and fear of China forming a sphere of influence through increasing economic obligations and connections has been proposed, but unverified.

Significant research on the topic shows a pattern of infrastructure development resulting in greater transportation abilities in the countries involved in the Belt and Road Initiative. This current research, however, tends to focus on the economic results of the BRI to the recipient country. Findings from the research conducted suggest that the networked effects of the Belt and Road Initiative proposed by Beijing are in effect. In the case of trade, it seems as though nations benefit from investments in other nations involved in the Belt and Road Initiative. This benefit is then externalized to China, in the form of greater trade flows. Outside of projects classified as “Belt and Road Initiative”, net foreign direct investments have a positive relationship with trade flows. Naturally, trade is also dependent on a multitude of other potential factors, not solely the amount of Foreign Direct Investment. Theoretically, this relationship follows in the pattern of the original Silk Road, wherein infrastructure along all nations involved in the Road increased trade flows. Particularly with regards to exports to China, investments in the Belt and Road Initiative create positive outcomes.  This also follows other research conducted on the topic, which discovered a causal linkage between Chinese investments and economic outcomes of the nations involved in the Belt and Road Initiative.
As measured in turbulence, protests and events associated with instability, the Belt and Road Initiative was found to have similarly positive outcomes for China. As the number of projects increased, average stability in turn increased, holding all other factors equal. As a policy that appeals to nationalistic tendencies through the assertion of political and economic power, the outcome matches prior expectations. Particularly with regards to minority populations, investments in countries with cultural ties likely benefits the perception of Beijing, in turn reducing instability. The increase in infrastructure and economic connectivity also likely creates externalities beneficial to citizens through greater access to products and lowered commodity prices.

When the Belt and Road Initiative was studied in terms of outcomes to China, it was found that the investment structures of the initiative increased both trade flows and internal stability. With implications for greater insight on both policy and international economics, this study of the Belt and Road Initiative has wide-reaching implications. Issues in the forefront of Southeast Asia, such as the South China Sea and potential instability can be contextualized through a greater understanding of the Belt and Road Initiative. The research outlined here is intended to further the knowledge of Chinese drivers in pursuing the Belt and Road Initiative. As trends in the Belt and Road Initiative evolve, the theory and research behind the Belt and Road Initiative continue to evolve as well. Nonetheless, the Belt and Road Initiative serves as a cornerstone of Chinese international posturing and calls for a comprehensive understanding.

Yes – and state policies could be doing more to fix it.

American states subsidize residential investments in solar panels, and in doing so they subsidize the people who buy them. If only high-income households are investing in solar panels and only those who invest are taking advantage of the subsidies, government support for solar panel investment doubles as government support for high-income households.

For the purposes of this blog, “high-income” is defined as an annual household income of over $150,000. This is more than double the national median household income, and can be un-controversially used here.

The bottom line is that between 2011 and 2017, across all 50 states in America, rich households had a statistically significant positive effect on the number of households with residential solar in a state and the amount of residential solar capacity built in a state. Below this income threshold, the marginal household added statistically insignificant or negative amounts of solar prosumers and capacity. The single exception to this trend was the lowest income group. The model in this paper showed households making less than $15,000 annually made significant positive contributions toward the amount of capacity and prosumers in their state. This is a perplexing result, and one that deserves further study. It is possible that a statistical model which tried to explain the relationship between high-income households and solar investment does a poor job of examining the very different case of households with 1/10th the income of the group this study was most closely designed to examine.

What does become clear from the results of this study is that high-income households buy in to solar in a way that middle-income households in all the groups between $15,000- and $150,000 do not.

Assuming for now that the low-income group is presenting anomalous results, the difference between high and middle income investment rates in solar could potentially be explained by net metering policies. An average solar panel costs about $5,000 per kW to install. At an average size of 5-6 kW per household, solar panels become a serious capital investment. While $25,000 costs a high income household no more than 1/6th of its annual income, it can equal or exceed the annual income of low or middle income households. Even if they made the decision to lease these panels, the upfront costs are still dramatic.

Fortunately for the households who can afford to invest in them, the panels could pay themselves off in 5-15 years due to volumetric subsidies like net metering. These policies essentially let the owners of solar panels sell their power back onto the electric grid for retail price instead of the wholesale price after they have negated all their own usage in a given billing period.

A solar investment model that pairs large upfront costs with government-supported production subsidies that pay back well over time is a formula for barring all but the rich from entry. Given the amounts of money involved, even a handsome return on investment could not entice a household to invest if it needs the same money for survival. This issue is somewhat reduced by the practice of leasing solar panels, though that alone does not obviate the cost issue.

In light of a widespread subsidy system that does not encourage low-income access to solar panels, what alternatives are available to state governments? A few options present themselves as alternatives to the volumetric approach. The first is a rebate. Shifting the time of the subsidy payment to match the time of the investment it is supposed to subsidy helps to reduce the group of people who would invest but are prevented by large upfront costs. The rebate retains many of the policy benefits of residential solar; it is distributed and thus delays necessary distribution investments, it is green and thus offsets fossil fuels, and it puts extra generation capacity online which may help to delay the need for new centralized generation.

Demand management programs that encourage users to shift their use away from peak usage can also prevent generation and distribution upgrade costs. One example would be a shift towards Time of Use Pricing, which rewards users who shift their demand to not coincide with “surge pricing.” Because demand management is an option that can be made usable for everyone, issues of the poor subsidizing the rich are avoided with this approach.

The government can also pass a renewable portfolio standard to increase green energy production, but this does not prevent the bills for new generation and distribution. Here, the public still benefits from avoiding fossil fuels but no residential electricity consumer is subsidized to produce. This shift towards centralized renewable energy production trades off the costs of grid upgrades for the benefits of equity.

In reality, the equity problems of solar subsidies will likely never be overcome. That does not mean, however, that the imbalance cannot be improved through some combination of the approaches listed above. Every state will face different policy challenges related to residential solar over time, but making equity a consistent priority has the potential to shift the way policymakers think about subsidies.

Credit to the Brookings Institution and ILSR for visualizations.