Report shows how the rural economy fell behind urban areas, and offers ways to close the gap

A new report from the Brookings Institution shows how the rural-urban economic divide developed and offers ideas for closing it. "For much of the 20th century, market forces had reduced job, wage, investment, and business formation disparities between more- and less-developed regions," Clara Hendrickson, Mark Muro and William Galston report. But the rising popularity of digital technology in the 1980s favored wired-up talent clusters in urban areas and left rural America behind — a divide that persists today in employment level, wages, and types of employment available, and may be partly responsible for the growing social divide between rural and urban areas.

The biggest metro areas account for 72 percent of U.S. employment growth since the recession in 2009 and 2010, and were the first to get back to pre-recession employment levels. The smallest rural communities still haven't gotten there, and the very smallest — rural areas not adjacent to metro areas — have actually seen employment declines since 2014.

Brookings Institution chart; click on it to view a larger version

Some believe rural America will naturally catch up sooner or later, but lawmakers, pundits, journalists, investors and scholars are increasingly considering how to close the rural-urban gap with new policies and new ways of thinking. Rather than relying solely on traditional regional development policies that favor big-city economic activity or try to ensure all rural areas in the region get a bigger piece of the economic pie, the Brookings report's authors recommends a third approach called place-sensitive distributed development.

That's a "mixed strategy that respects the efficiency of hubs of concentrated economic activity but seeks to extend this kind of dynamism to more regions by ensuring access to the basic prerequisites of high-quality growth," Hendrickson, Muro and Galston write. "This approach assumes that regional equity won’t occur without economic development but that excessive imbalances between regions can jeopardize such development. Our place-sensitive strategy seeks to mitigate uneven development by ensuring economic growth occurs in a wider swath of regions."

• In practice, this approach might employ the following strategies:
• Boost the digital skills of workers in rural areas
• Make sure businesses in economically depressed areas have access to business funding
• Make sure rural areas have broadband
• Identify and strengthen "growth poles": promising rural communities whose growth could help the surrounding region 
• Help Americans make long-distance moves to areas with better jobs