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Characterizing Rural Texas

Is Everyone Leaving the Farm?
Despite the widespread economic growth of the last decade, Texas’ cities still far outshine rural areas, with higher population, per capita income, and total employment, as well as lower unemployment and poverty rates.

chart Such trends all contribute to the physical growth of metropolitan areas. According to the USDA, 1.2 million acres of Texas lands were developed for urban uses between 1992 and 1997, more than any other state.[30] That’s one acre every two minutes, a rate 75 percent higher than that of the 1980s.[31] This fast-paced urbanization could reduce the number of Texas acres available for agriculture and increase competition for the state’s limited water resources.

During each decade since 1970, all metro counties in Texas have had population growth, with the only exception being three metro counties during the 1980s. The non-metro population is also growing, but its share of the state’s population, compared to the cities, is dropping steadily, simply because metro areas are growing faster. Texas’ non-metro population share fell from 18.8 percent to 15.4 percent between 1980 and 1999. That’s almost twice as fast a decline as the U.S. average.[32] (See Exhibit 7.)

chart

In recent years, the flow of Texans from non-metro to metro communities has slowed somewhat, at least compared to the 1980s. Between 1980 and 1990, Texas’ non-metro population increased by 4.3 percent, while the state’s metro population grew by a whopping 22.3 percent. By contrast, in the 1990s (1990-99), the non-metro population growth rate doubled, jumping to 9.5 percent, while the metro growth rate of 19.2 percent (with more growth possible in the last year) remains below the prior decade’s. Still, metro regions added residents twice as fast as non-metro areas throughout the 1990s. (See Exhibit 8.)

National patterns
During the 1990s, non-metro areas have seen a population rebound. In 1994-1995, the non-metro rate of population growth actually exceeded the metro rate. However, the pace of rural and small-town population rebound has since slowed. Most non-metro population growth stemmed from persons moving into rural areas rather than new births.[33]

According to a report by the USDA’s Economic Research Service (ERS), from March 1997 through March 1999, 3.9 million Americans moved into non-metro areas from metro areas, while only 3.3 million moved from non-metro areas to the cities. Though slower than the previous two years, when the total inflow of people was over 900,000, net migration of newcomers remained positive through 1999. The report notes that this pattern contrasts with the 1980s when “the rural economy faced a major recession with setbacks in agriculture and mining.” However, those non-metro counties that are highly dependent on the rural industries of mining and farming were the ones with the greatest fall off in their pace of growth since 1995.[34]

The USDA reported earlier that net movement into rural areas between March 1995 and March 1997 was highest for the early career ages (26-30) and that college graduates were well-represented.[35] Beginning in 1992 “more college-educated people migrated into than out of non-metro areas” unlike in earlier decades, when rural “brain drain” was the result of a large share of college graduates moving to the nation’s cities. In 1995-1996, net migration to non-metro areas of college graduates was double the rate for high school graduates. Since then, the ERS reports that much of the recent decline in non-metro migration is due to college graduates moving out in numbers almost equal with those moving in.[36]

The ERS also showed that the rural South and Midwest were the most popular migration destinations, dominated by younger migrants. Within the rural South, Texas and Georgia were the most popular destinations.[37]

Urban proximity
Much of the population growth in Texas’ rural counties has been driven by their proximity to urban centers. Between 1983 and 1993, the Texas counties that showed the largest increases in population growth were those with a relatively small (fewer than 30,000) initial population that were adjacent to a metropolitan area. Rural counties in more isolated areas didn’t fare as well. In the 1990s, 70 rural Texas counties lost population. The biggest losers were those that are economically dependent on farming or oil and gas and have no nearby metropolitan area.

The USDA’s ERS reports that commuting has become an integral part of rural life, allowing residents to take advantage of job opportunities in nearby metro areas or larger towns.[38] A surprising amount of rural commuting, however—about 90 percent—occurs between rural locations rather than to the big city. USDA classifies 25 rural Texas counties as “commuter” counties, in which 40 percent or more of all workers in 1990 commuted to jobs outside of their county of residence.

Commuter counties were the only type of non-metro counties that were not affected by the reduction in population growth during the late 1990s.[39] (See Exhibit 9.)

Over the last three decades, the population of Texas counties classified as rural by the USDA in 1993 has risen by 33 percent, compared to a metro increase of 90 percent. In all, the rural counties farthest from metro areas experienced the least growth. (See Exhibit 10.)

Exhibit 10
Rural/Metro Population Growth 1970-1999
  Average County Population 1999 Population Growth 1970-1980 Population Growth 1980-1990 Population Growth 1990-1999 Population Growth 1970-1999
Rural 15,735 16.6% 4.3% 9.5% 33.2%
Metro 292,416 30.4% 22.3% 19.2% 90.1%
Sources: U.S. Census Bureau and Texas Comptroller of Public Accounts.

American Demographics magazine, reporting on a study performed by ERS economist David McGranahan, noted that “in the last decade Americans of all ages have been moving back to non-metro rural counties, reversing nearly a century of population losses in former mining and farming counties.”[40] The study shows that the counties that did best had the highest level of “natural amenities”—they had temperate climates and features of natural beauty, such as water and mountains. Unsurprisingly, counties reliant on retirement and recreation experienced the most growth.

After devising an “attractiveness scale” based on terrain, summer and winter temperatures, summer humidity, water area, and winter sun levels, McGranahan found that counties with interesting terrain rate high for growth, while the lower-ranking counties “are basically flat.” But many other factors make localities desirable, chiefly the small-town environment or proximity to urban centers.

Among counties with relatively desirable natural amenities, the highest population and employment growth was recorded by those near large population centers, with their better access to jobs, education and other non-natural resources. McGranahan states that “amenities are the rural competitive advantage,” since Americans make decisions on where they want to live based not only on wages, but also a higher quality of life. “It isn’t esoteric,” he adds. “People want to get a life.”

No Texas counties ranked at the highest end of McGranahan’s natural amenities scale (1 lowest to 7 highest) and only four counties ranked in level 6—Bandera, Kendall, Val Verde, and Jeff Davis counties. Another 32 rural Texas counties ranked at level 5, 134 at level 4, and 26 at level 3. No Texas counties ranked below level 3.

Texas growth patterns seem to bear McGranahan’s thesis out. Bandera and Kendall counties, located in the Texas Hill Country, were among Texas’ top five rural counties in population growth from 1970 to 1999, with a more than 200 percent increase, while both Val Verde and Jeff Davis were in the top 40 counties in terms of growth.

Old Folks at Home?
On average, rural Texas counties have a bigger share of older citizens than their city counterparts. In 1999, non-metro Texas accounted for a sixth of the state’s population, but was home to nearly one quarter of Texans over 65. In that year, only 9 percent of the state’s urban population was over 65, compared to 15 percent of the population in rural counties. The concentration of elderly Texans is greatest—22 percent—in the “most rural” counties, as defined by USDA.

This situation, however, is changing. In metro counties, the over-65 population rose by more than 22 percent between 1990 and 1999, compared to a total metro population growth of just over 19 percent. By contrast, the growth rate over the period for the rural over-65 population was just under 3.5 percent, compared to a total rate of 9.5 percent.

In the 1990s, the over-65 age group increased in all but three metro counties but just in 89 of Texas’ 196 rural counties. An ERS analysis of national rural population trends noted similar findings. The recent decline in over-65 rural growth rates is “remarkable not so much for the amount of decline but for the fact that it happened at all, given the common image of farm-dependent areas as places of ever-rising age.”[41] In fact, the ERS remarks that while “the popular impression that non-metro counties have a higher than average proportion of older people is correct, but the absolute number of non-metro elderly are now as likely to be falling as rising.”[42] (See Exhibit 11.)

Exhibit 11
Rural/Metro Over-65 Population Growth and Share 1990-1999
  Average County Over-65 Population 1999 Average County Over-65 Population Growth 1990-1999 Average County Total Population Growth 1990-1999 Over-65 Population Share 1999
Rural 2,381 3.4 9.5% 15.1%
Metro 26,720 22.2% 19.2% 9.1%
Sources: US. Census Bureau and Texas Comptroller of Public Accounts.

Many believe rural life can be kinder to older people, because it offers less traffic, air pollution, and crime, and usually entails a lower cost of living than city life. On the other hand, urban areas offer more transportation options and more advanced medical care, also important to older Texans. USDA reports that “rural health services are less accessible and more costly to deliver than in urban areas, and...fewer health care providers exist in rural areas to offer specialized services.”[43]

Recent advances in medical care are extending human lives, an advance illustrated by the rising number of Texans over age 85. Between 1990 and 1999, the number of over-85 Texans rose by 41 percent. In metro counties, the increase was even higher, at over 47 percent.

According to a USDA-ERS study, 27 of Texas’ rural counties can be considered “retirement havens.” These counties’ populations aged 60 years and over increased by 15 percent or more between 1980 and 1990, primarily because older people moved into the counties.[44] (See Exhibit 12.)

Texas’ retirement havens are rural counties typically located near a metro area or a relatively large town, that can meet many of the lifestyle and medical care needs of senior citizens. According to USDA, factors contributing to migration to such areas are the improved health of older people, earlier retirement ages, higher retirement incomes, a preference for smaller communities, and improvements in transportation and communications.[45] The agency notes that “urban proximity facilitates growth, as retirees move toward facilities and resources in urban areas as well as to places with amenities.”[46] Five of Texas’ “retirement haven” counties, for example, are in the scenic Texas Hill Country, not far from San Antonio and Austin—Bandera, Blanco, Gillespie, Kendall and Kerr counties.

Working—On the Farm and Off
Out of 11.7 million Texans working in 1998, only 1.5 million or 13 percent were employed in rural counties.[47] Between 1970 and 1998, metro employment levels jumped by almost 149 percent, while rural employment increased by just over 58 percent. That growth, moreover, was not spread evenly. Thirty-five of the state’s 196 rural counties actually lost jobs over this period, mostly in smaller counties with fewer than 5,000 jobs. King County in North Texas actually lost more than forty percent of all its jobs, while five other counties lost more than a quarter of their total employment. By contrast, none of Texas’ urban counties lost jobs between 1970 and 1998. (See Exhibit 13.)

Exhibit 13
Rural/Metro Employment Growth 1970-1999
  Total Employment 1998 Employment Growth 1970-1980 Employment Growth 1980-1990 Employment Growth 1990-1998 Employment Growth 1970-1998
Rural 1,521,880 25.9% 6.6% 18.1% 58.5%
Metro 10,156,473 54.3% 27.2% 26.7% 148.6%
Sources: Bureau of Economic Analysis and Texas Comptroller of Public Accounts.

Ironically, even the agricultural services industry is growing faster in cities than in rural areas, due largely to greater demand for landscaping and veterinarian services. The Texas Workforce Commission estimates that landscaping alone will account for nearly two-thirds of the growth in agricultural services due to new construction and maintenance as individuals, both urban and rural, “utilize these services as a means of preserving leisure time.”[48]

According to the USDA, while farming remains important as a source of employment in many rural areas, it is no longer the dominant rural industry, nor is it likely to be so again. Today, the largest share of rural jobs and employment growth comes from various non-agricultural services.[49]

In Texas, from 1970 to 1998, the services sector was the largest factor in employment growth for metro and rural counties alike. In the state’s 58 metro counties, employment in non-agricultural services rose by a whopping 291 percent, almost twice the total metro employment growth rate (149 percent).

In rural Texas, services employment rose by 114 percent, nearly double that for total rural employment. USDA-ERS states that “rural services related to recreation, retirement and such natural amenities as mountains, lakes, shorelines, etc. have emerged as important new sources of rural employment and growth,” and “advances in telecommunications are enabling still other types of services—telemarketing, data processing—to move to rural areas.”[50] (See Exhibit 14.)

Exhibit 14
Texas Industry Employment Share and Growth Rate 1970-1998
Industry Share of State Employment 1998 1970-1998 State Growth Rate Share of Metro Employment 1998 1970-1998 Metro Growth Rate Share of Rural Employment 1998 1970-1998 Rural Growth Rate
Ag Services, Forestry, Fishing 1.2% 326.3% 1.0% 411.6% 2.7% 204.6%
Farming 2.4% -3.4% 0.9% 2.3% 12.5% -5.9%
Mining 2.2% 80.8% 1.9% 111.0% 3.7% 26.1%
Construction 6.4% 150.6% 6.5% 163.4% 5.6% 82.8%
Manufacturing 9.9% 53.2% 9.9% 53.5% 9.8% 51.9%
Transportation/Public Utilities 5.4% 127.5% 5.6% 142.0% 3.9% 51.0%
Wholesale Trade 4.8% 103.7% 5.1% 110.5% 2.9% 49.9%
Retail Trade 16.6% 145.3% 16.8% 164.7% 15.4% 60.2%
Finance, Insurance and Real Estate 7.5% 167.7% 7.8% 177.2% 5.0% 98.0%
Services 29.4% 261.4% 30.6% 291.2% 21.5% 113.7%
Government 14.2% 82.6% 13.8% 82.4% 17.1% 83.8%
Sources: Bureau of Economic Analysis and Texas Comptroller of Public Accounts.

The agricultural services, farm, oil and gas, and government sectors all account for higher shares of employment in rural areas than in the cities. The only sector to lose jobs in Texas from 1970 to 1998 was farming, and unsurprisingly, farming’s decline was felt most strongly in rural Texas rather than in metro areas where there was actually a slight growth in farm jobs. USDA-ERS states that “the decline of farming employment is, in many ways, a consequence of success. Increases in farm productivity through advances in production technology, crop science and [farm] management have led to decreases in farm employment. Simply put: fewer people are needed to produce an increasing amount of farm goods.”[51]

The mining sector’s growth rate, second-lowest for all industries in rural counties, reflects the oil and gas industry’s downsizing and streamlining efforts after the mid-1980s bust. Therefore, two of rural Texas’ mainstay industries have provided little or no employment growth over the last three decades.

One West Texas rancher told us that about the only way a rancher can stay in business is to have a wife working for the county or local school district, to keep the family insured and help make ends meet. Apparently, government is the most reliable source of employment for many rural Texans.

Mainstay Rural Industries
In some rural counties, the impact of certain industries is particularly high. The USDA has developed a classification system for rural counties that designates certain counties as dependent on farming, mining, manufacturing, services or government, based on various levels of labor and proprietor income. (See Exhibit 16.)

The USDA has defined farming-dependent counties as non-metro counties in which farming contributed a weighted annual average of 20 percent or more of total labor and proprietor income from 1987 to 1989. Mining-dependent counties are those where mining contributed a weighted annual average of 15 percent or more of total labor and proprietor income. In manufacturing-dependent counties, manufacturing contributed 30 percent or more of total income.

Services-dependent counties relied on private and personal services, agricultural services, wholesale and retail trade, finance and insurance, transportation and public utilities, for 50 percent or more of their total income. Finally, government-dependent counties looked to government activities for 25 percent or more of their total labor and proprietor income from 1987 to 1989.[52] Counties that met the qualifications for more than one category were classified as dependent on the most important one, so it should be noted that some counties may have more than one major economic influence, such as both farming and mining.

Under this classification system, 65 Texas counties—one-third of all rural counties—are farming-dependent. According to the USDA, though at one time most rural counties looked to farming as their primary source of income, the number of farming-dependent counties has shrunk dramatically since 1950.[53] The most rural group, the Lonely Counties, had the highest number of farming-dependent counties, followed by the Small Town Counties. Neither county type is adjacent to a metro area, so farming is likely to be of higher importance in these communities. Thirty rural Texas counties are classified as mining-dependent. Mining mostly means oil and gas in Texas, so these 30 counties are those with large oil and gas deposits, and are located mostly in West and South Texas.

Only 11 of Texas’ rural counties are manufacturing-dependent; eight of them are adjacent to metropolitan areas. The type of manufacturing varies among the counties, ranging from lumber to food processing to nuclear weapons disassembly in Carson County. Many manufacturing-dependent counties have timber or mineral deposits, and their manufacturing industries often are located near the raw materials they process. According to the USDA, manufacturing counties are more likely than other non-metro counties to have larger towns and relatively high populations, and to be located near major urban centers.[54]

Texas’ 24 services-dependent counties reflect a wide variety of lifestyles; many have the natural amenities that encourage recreation, tourism, and retirement. Nine are classified as retirement havens, and most benefit from tourism, including hunting and fishing. Other important service employers are the health care industry and agribusiness.

Nineteen rural Texas counties are government-dependent, indicating a relatively severe lack of private industry employment.

Rural Unemployment
Rural Texas suffers from higher unemployment rates than do the state’s metro areas. In 1999, metro unemployment rates reached their lowest point in a decade, dropping more than 40 percent from a high rate of 7.6 percent in 1992 to 4.4 percent.[55] Over the same period, rural unemployment remained higher and showed a smaller drop, going from a high rate of 8.4 to 5.9 percent, a reduction of 30 percent.

In 1999, 96 rural counties had unemployment rates higher than the state average of 4.6 percent, ranging up to 27.8 percent in Presidio County, near the Texas-Mexico border. Twenty–one rural counties had 1999 unemployment rates over 10 percent. Unemployment worsened in the 1990s in 100 of the 196 rural counties while only 11 out of 58 metro counties saw higher unemployment rates. Fifteen rural counties saw their unemployment rates more than double over the decade, and all but one of these were farming- or mining-dependent. McMullen County ended the 1990s with an unemployment rate 5 times higher than its 1990 level.

In the 1990s, eight rural counties cut their unemployment by at least half. Both Collingsworth and Armstrong Counties reduced their unemployment rates by over two-thirds. (See Exhibit 15.)

Exhibit 15
Rural/Metro Unemployment Rates
County Type Unemployment Rate 1990 Unemployment Rate 1999
Rural 6.7% 5.9%
Metro 6.3% 4.4%
Sources: Texas Workforce Commission and Texas Comptroller of Public Accounts.

It should be noted, moreover, that many rural jobs are part-time. USDA-ERS indicates that in a number of industries such as finance, insurance and real estate, rural jobs often are part-time, while their urban equivalents are more likely to be full-time.[56]

USDA-ERS also notes that unemployment is only part of the problem. Low-skill, low-paying jobs are common in rural areas, and the wages of many rural workers are simply not high enough to pull them out of poverty. Thus the nation’s working poor are more likely to live in rural areas than urban; about 30 percent of the poor who are full-time, full-year workers live in rural areas.[57]

Income and Poverty in Rural Texas
Rural Texans generally have lower incomes than their urban counterparts. In 1998, the state’s average per capita income was $25,369; rural Texans had an average income of only $18,938 per person, versus $26,555 for metro residents.

On average, metro dwellers make over 40 percent more than do rural residents. Only 15 of Texas’ 196 rural counties had average per capita incomes above the state average in 1998. (See Exhibit 17.)

Exhibit 17
Rural Counties Exceeding the State Average Per Capita Income Level
County Name Adjacent to Metro Area 1998 Personal Income (Thousands) 1998 County Population 1998 Per Capita Income % Higher than the State Average Per Capita Income
Sherman No $111,068 2,866 $38,754 52.8%
Hansford No $178,527 5,349 $33,376 31.6%
Loving No $3,811 116 $32,853 29.5%
Castro No $239,258 8,314 $28,778 13.4%
Hemphill No $100,946 3,527 $28,621 12.8%
Dallam No $183,056 6,553 $27,935 10.1%
Hartley No $143,465 5,142 $27,901 10.0%
Kendall Yes $583,605 21,190 $27,542 8.6%
Somervell Yes $173,704 6,385 $27,205 7.2%
Ochiltree No $232,786 8,791 $26,480 4.4%
Wheeler No $137,760 5,286 $26,061 2.7%
Lipscomb No $77,009 2,962 $25,999 2.5%
Carson Yes $173,464 6,707 $25,863 1.9%
Washington Yes $747,389 29,119 $25,667 1.2%
Kerr No $1,085,789 42,667 $25,448 0.3%
Sources: Bureau of Economic Analysis and Texas Comptroller of Public Accounts.

The other 181 rural counties all had below-average income levels—some of them extremely low. In 1998, Starr County in South Texas had the lowest per capita income in the state, at only $8,225—a third of the average Texan’s. Eleven rural counties had average per capita incomes of less than half the state average; 49 fell below two-thirds of the state average. By contrast, in 1998 all but 9 of the 58 metro counties had per capita incomes above the rural average. The lowest per capita income counties, rural and metro, are located primarily along the Texas-Mexico border. (See Exhibit 18.)

Exhibit 18
Rural Counties with the 15 Highest Poverty Rates
County Persistent Poverty Transfer Payments Poverty Rate 1995 Change in Poverty Rate from 1989 1998 Per Capita Income
Starr* Yes Yes 46.7% -13.3% $8,225
Zavala Yes Yes 45.2% -5.2% $10,215
Dimmit* Yes Yes 40.2% -8.7% $12,005
Willacy Yes Yes 39.7% -4.8% $11,965
Maverick* Yes Yes 39.7% -10.7% $10,258
Brooks Yes Yes 38.4% 1.6% $13,644
Presidio* Yes Yes 35.6% -12.5% $10,296
La Salle Yes Yes 35.4% -1.6% $12,704
Frio Yes Yes 35.0% -4.1% $13,536
Hudspeth* Yes No 32.9% -6.0% $12,131
Culberson No No 32.6% 2.8% $13,482
Zapata* Yes Yes 32.1% -8.9% $12,126
Duval Yes Yes 31.9% -7.1% $12,942
Edwards Yes No 30.8% -10.9% $8,401
Jim Hogg Yes No 30.5% -4.8% $16,391
*Adjoins the Texas-Mexico border.
Sources: U.S. Census Bureau and Comptroller of Public Accounts.

Employment, population and earnings growth, and changes in commuting and industry of employment all can affect per capita income levels. USDA-ERS reports that during 1996, rural real per capita income growth increased slightly faster than metro income, 2.4 percent compared to 2.1 percent.[58]

In 1997, Texas’ statewide poverty rate was 16.7 percent with 136 rural counties seeing higher rates. The poverty rate averaged more than 20 percent in the state’s rural counties versus slightly over 16 percent in metro counties. The vast majority of rural counties, 85 percent, enjoyed lower poverty rates between 1989 and 1997, though 27 experienced increases.[59]

The USDA classifies 72 Texas counties as “persistent-poverty” counties, in which persons with poverty-level incomes accounted for 20 percent or more of the total population in each of four years (1960, 1970, 1980, and 1990).[60] According to the USDA, the US had 535 persistent-poverty counties in 1990, with poverty rates ranging from 20 to 63 percent. Texas has one of the nation’s highest concentrations of such counties.[61]

The USDA considers 26 rural Texas counties “transfers-dependent”—that is, federal, state, and local government payments (including social security and other government retirement payments, medical payments, unemployment payments, veterans benefit payments, food stamps and other income maintenance benefit payments) contributed 25 percent or more of total personal income in the county between 1987 and 1989.[62] These counties primarily are located on the Texas-Mexico border, the Northern Great Plains, and in East Texas. Most rural Texas counties with the highest poverty rates are classified both as persistent-poverty and transfers-dependent counties, and all are located on or near the border. (See Exhibit 19.)

The USDA notes that “hand in hand with poverty is a lack of basic necessities such as health care, good nutrition, education, and essential public services,” as is seen in many colonias developments along the Texas-Mexico border.[63]

Neighbors Matter
As has already been indicated, the biggest factor affecting rural growth is counties’ proximity or “adjacency” to a metro area. In Texas between 1983 and 1993, 19 counties became adjacent counties as metro areas spread outward.[64]

Of Texas’ 196 rural counties, 106 are located near one of the state’s 27 metro areas. These adjacent counties contain more people on average and show a higher population growth than the other 90 rural counties.

Though adjacent counties have surpassed their more isolated counterparts in population growth over each of the last three decades, growth rates in non-adjacent counties speeded up during the 1990s. As metro areas spread out, the non-adjacent rural counties automatically are coming closer to metropolitan areas and thus are becoming more like adjacent counties. (See Exhibit 20 and Exhibit 21.)

The 33 adjacent counties next to the state’s six-largest metro areas—Houston, Dallas, San Antonio, Austin, Fort Worth and El Paso—have nearly twice the average population and have seen twice as much growth as counties surrounding other, smaller metros. (See Exhibit 22.)

Exhibit 22
Rural Population Growth 1970-1999
  Average County Population 1999 Population Growth 1970-1980 Population Growth 1980-1990 Population Growth 1990-1999 Population Growth 1970-1999
Adjacent 18,964 17.9% 6.4% 11.4% 39.8%
  To Major Metros 26,714 21.8% 14.9% 16.4% 62.9%
  To Other Metros 15,460 15.6% 1.1% 7.7% 25.9%
Non-Adjacent 11,932 14.5% 0.8% 6.1% 22.4%
Metro 292,416 30.4% 22.3% 19.2% 90.1%
Sources: U.S. Census Bureau and Texas Comptroller of Public Accounts.

These patterns hold true for the over-65 population as well. The adjacent counties are showing larger growth than the non-adjacent in over-65 population, but again, both categories trail far behind metro areas. Counties adjacent to the six largest metro centers led the rural counties in the over-65 growth rate—more than twice the non-adjacent rate, but less than a quarter of the metro rate. (See Exhibit 23.)

Exhibit 23
Rural Over-65 Population Growth and Share 1990-1999
County Type Average County Over-65 Population 1999 Average Over-65 Population Growth 1990-1999 Average Total Population Growth 1990-1999 Over-65 Population Share 1999
Adjacent 2,792 4.2% 11.4% 14.7%
  To Major Metros 3,860 4.9% 16.4% 14.5%
  To Other Metros 2,310 3.7% 7.7% 14.9%
Non-Adjacent 1,897 2.0% 6.1% 15.9%
Metro 26,720 22.2% 19.2% 9.1%
Sources: US. Census Bureau and Texas Comptroller of Public Accounts.

Employment growth has followed the same general pattern as population—overall, adjacent counties create jobs faster than non-adjacent ones, but metro areas lead both by a comfortable margin. However, only those counties adjacent to the six-largest urban centers show higher employment growth; the other adjacent counties actually performed at the same level as the non-adjacent counties. (See Exhibit 24.)

Exhibit 24
Rural Employment Growth and Share 1970-1998
County Type County Employment 1998 Employment Growth 1970-1980 Employment Growth 1980-1990 Employment Growth 1990-1998 Employment Growth 1970-1998
Adjacent 8,976 29.1% 7.4% 19.4% 65.5%
  To Major Metros 12,984 33.6% 15.5% 26.5% 95.3%
  To Other Metros 7,164 26.4% 2.1% 14.1% 47.1%
Non-Adjacent 6,338 21.1% 5.3% 16.0% 48.0%
Metro 175,112 54.3% 27.2% 26.7% 148.6%
Sources: Bureau of Economic Analysis and Texas Comptroller of Public Accounts.

Unemployment rates in 1999 in both adjacent and non-adjacent counties averaged 5.7 and 6.3 percent respectively, compared to an average of 4.4 percent in metro areas. Since 1990, the state’s metro areas have substantially cut their unemployment, dropping by nearly 2 percentage points, while rural county unemployment has seen less than half that reduction. Counties adjacent to the largest metro areas, however, performed considerably better than even metro counties; counties outside of Houston, Dallas, San Antonio, Austin, Fort Worth and El Paso saw their average unemployment rates fall by 1.6 percent between 1990 and 1999, from 5.4 percent to 3.8 percent. In contrast, those counties adjacent to the smaller metros barely decreased average unemployment, dropping by only 0.1 percent, from 7.5 percent to 7.4 percent during the 1990s. (See Exhibit 25.)

Exhibit 25
Rural Average Unemployment Rates
County Type Unemployment Rate 1990 Unemployment Rate 1999
Adjacent 6.6% 5.7%
  To Major Metros 5.4% 3.8%
  To Other Metros 7.5% 7.4%
Non-Adjacent 6.8% 6.3%
Metro 6.3% 4.4%
Sources: Texas Workforce Commission and Texas Comptroller of Public Accounts.

All rural counties have lower average per capita income levels with lower growth than their metro counterparts. Over the past 30 years, the adjacent counties, considered as a group, have seen slightly higher income growth than the non-adjacent counties (47.1 percent versus 46.1 percent).

Breaking down the adjacent counties into those next to the big six cities and those next to smaller metro areas reveals, however, that the real income growth was higher than the non-adjacent counties for the big metros but lower for the counties surrounding small metros.

The non-adjacent counties have the highest average per capita income levels of the rural counties, but have seen successively lower growth rates in each of the last three decades. In contrast, those counties adjacent to both big and small metros have increased real income on average during the 1990s. (See Exhibit 26.)

Exhibit 26
Rural Per Capita Incomes
  Average County Per Capita Income 1998 Real Income Growth 1970-1980 Real Income Growth 1980-1990 Real Income Growth 1990-1998 Real Income Growth 1970-1998
Adjacent $18,825 24.8% 6.7% 10.4% 47.1%
  To Major Metros $19,853 30.4% 6.9% 14.1% 59.0%
  To Other Metros $18,036 21.5% 6.4% 7.4% 38.8%
Non-Adjacent $19,149 18.6% 13.6% 8.4% 46.1%
Metro $26,555 29.2% 10.0% 17.2% 66.6%
Sources: Bureau of Economic Analysis and Texas Comptroller of Public Accounts.

The Small Town Counties (Type 7) had the highest per capita income levels in 1998 closely followed by the most rural Lonely Counties (Type 9). While all of the rural county types saw growth in real per capita income from 1970 to 1998, the Lonely Counties moved during the last decade from being the highest income growth level counties to the lowest, seeing just a 1.7 percent increase in real per capita income from 1990 to 1998.

Poverty rates in 1997 in all rural counties were considerably higher compared to an average of 16.2 percent in metro areas, with the worst poverty levels occurring in non-adjacent counties. Those counties adjacent to the smaller metros areas actually had the same poverty rate as the non-adjacent counties in 1997, while counties neighboring the largest cities had poverty rates only slightly higher than did metro counties. (See Exhibit 27.)

Exhibit 27
Rural Average Poverty Rates
County Type Poverty Rate 1989 Poverty Rate 1997
Adjacent 21.7% 19.6%
  To Major Metros 19.2% 17.0%
  To Other Metros 23.6% 21.5%
Non-Adjacent 23.8% 21.5%
Metro 16.9% 16.2%
Sources: Texas Workforce Commission and Texas Comptroller of Public Accounts.

North, South, East and West
Texas is a huge state with significant regional differences. Differences in climate, topography, rainfall, and natural resources all affect county demographics and economics. Among Texas’ rural counties, location in a particular region–north, south, east or west—can mean as much to their economic prospects as adjacency to metro areas.

Using I-35 and I-10 as rough dividing lines, the Comptroller’s staff divided the state’s 254 counties into four regions—Northeast, Northwest, Southwest and Southeast. (See Exhibit 28.)

The eastern half of Texas is by far the most metropolitan section. There are 107 counties located east of a rough dividing line running north-south along Interstate 35. Forty-four eastern counties, or 41 percent, are metro counties comprising 17 metro areas, including five of the state’s six biggest urban areas. The vast majority of Texas’ eastern rural counties, 50 out of 63, are adjacent counties, with almost half located next to the big metros.

This part of the state is seeing fewer rural counties as the urbanized areas expand. In 1983, there were 21 non-adjacent rural counties in the eastern regions, but by 1993 just 13 remained that are not adjacent to some metro area. In the Southeast region, the triangle of adjacent counties between Houston, San Antonio-Austin and Corpus Christi has inexorably moved inward until only Fayette and Colorado counties were left as non-adjacent under the USDA classification in 1993. By 2003, it is likely that those two counties will also be considered adjacent to one of the metro areas and at that point, the entire Southeast region will be made up of either metro or adjacent counties.

In contrast, the western half of Texas is predominantly rural. Only 14 of the 147 counties located west of I-35 are considered metro. Of the rural counties, more than half are non-adjacent. The western half of Texas contains the vast majority of farming- and mining-dependent rural counties.

Exhibit 29
Regional Characteristics
Region Number of Rural Counties Number of Metro Areas Number of Largest Metros Percent Adjacent Counties Number of Mining Dependent Number of Farming Dependent
Northeast 47 10 3 77% 4 3
Southeast 16 6.5* 1.5* 88% 3 1
Southwest 36 4.5* 1.5* 33% 10 7
Northwest 97 6 0 45% 48 19
All 196 27 6 54% 65 30
*The five San Antonio metro counties are divided between both the Southeast and the Southwest regions.
Sources: USDA Economic Research Service and Texas Comptroller of Public Accounts.

Four Regions: Northeast
Texas’ Northeast region is the most metropolitan of the four, with 27 metro counties in the Dallas-Ft. Worth, Texarkana, Longview-Marshall, Tyler, Sherman-Denison, Waco, Temple-Killeen, Bryan-College Station, and Austin metro areas. The region also has 47 rural counties, 36 of which are adjacent to a metro county.

Only four Northeast counties are farming-dependent (out of 65 statewide) and three are mining-dependent (out of 30). Eight of Texas’ 11 manufacturing-dependent rural counties, however, are located in the Northeast.

Between 1970 and 1999, the rural population of the Northeast rose by nearly 51 percent. Rural employment growth grew by 91 percent, the highest of the four regions. This region, however, also has the second-highest average rural unemployment and the second-lowest average rural per capita income.

Northwest
The Northwest is Texas’ most rural region. Half of Texas’ rural counties are located in this region, which is most dependent on the traditional rural industries of agriculture and oil and gas. Of the region’s 97 rural counties, 44 are adjacent to one of six metro areas—Amarillo, Lubbock, Wichita Falls, Midland-Odessa, San Angelo, and Abilene. None of the six largest metros are located in this region.

Most of Texas’ farming-dependent counties (48 out of a total 65) are located in this region, as well almost all of the mining-dependent counties (19 out of 30).

The Northwest has the lowest population and employment growth of all four regions. Its average rural county population rose by just over 9 percent between 1970 and 1999, while rural employment rose by more than 28 percent. This region, however, had the highest average rural per capita income level and the lowest rural unemployment and poverty rates of the four.

Southwest
The Southwest is Texas’ fastest-growing region in population. It’s also the poorest of the state’ regions. The Southwest region contains 36 rural counties, of which 12 are adjacent to a metro area. All but one (San Antonio) of the region’s five metro areas as well as 11 of its rural counties adjoin the Texas-Mexico border.

Ten counties in this region are farming-dependent and seven are mining-dependent. More than one-half of Texas’ government-dependent counties are located in the Southwest; no manufacturing-dependent counties are.

Between 1970 and 1999, the Southwest’s average rural county population rose by nearly 59 percent, highest of all the state’s regions, and the region scored second-highest in rural employment growth, at more than 77 percent. However, this region, which includes all the border counties, also had the lowest average rural per capita income and the highest average rural unemployment and poverty rates. Out of 36 Southwest rural counties, 25 suffer from persistent poverty and twelve of these are also transfers-dependent.

Southeast
The Southeast region is the least rural of Texas’ four regions. The region, which includes Houston-Galveston, Brazoria, Victoria, Corpus Christi, and Beaumont-Port Arthur, has 17 metro counties and just 16 rural counties. Only two of the region’s rural counties are not adjacent to a metro area. Three are considered farming-dependent; one is mining-dependent; and five counties suffer from persistent poverty.

Within the Southeast region, average county rural population rose by over 22 percent between 1970 and 1999, while rural employment rose by 54 percent. In all, the Southeast seems best off economically among the four regions, with the second lowest regional unemployment rate and the second highest per capita income level. (See Exhibits 29 and 30.)

Exhibit 30
Regional Economic Indicators
  Average County Population 1999 Population Growth 1970-1999 Average County Employment 1998 Employment Growth 1970-1998 Per Capita Income 1998 Annual Unemployment Rate 1999 Poverty Rate 1997
Northeast 25,998 50.7% 12,518 90.9% $19,201 5.3% 18.2%
Southeast 20,185 22.5% 10,952 54.0% $20,026 5.7% 18.8%
Southwest 16,282 58.6% 6,664 77.6% $15,336 10.2% 29.3%
Northwest 9,824 9.4% 5,345 28.5% $20,137 4.7% 17.9%
All Rural 15,735 33.2% 7,765 58.5% $18,938 5.9% 20.2%
Sources: USDA Economic Research Service and Texas Comptroller of Public Accounts.

Rural Texas Now
Today, Texas has fewer rural counties than ever before. Urban centers continue to sprawl outwards, taking in smaller towns; places that once were “out in the country” are in town. For example, Waxahachie and Weatherford are rapidly becoming integrated into the Dallas/Fort Worth Metroplex, while the dividing line between New Braunfels and San Antonio is difficult to see from a car window.

Nonetheless, the exodus from rural counties slowed in the 1990s, and while metro counties still are growing faster than rural ones, the gap has narrowed. Some rural areas are seeing renewed growth in their under-65 populations.

Employment growth is still relatively slow in rural Texas, and unemployment often remains high. Higher productivity continues to eliminate farm jobs, and fewer rural counties are economically dependent on farming. Rural income remains lower than in the cities and poverty rates are higher but improving.

Yet many of the changes in rural America have been positive. Today, rural families are better housed and more likely to own their own homes. High school completion rates have risen in rural areas. But college completion rates continue to lag, sending ominous signals concerning the ability of rural communities to compete in the Information Age.[65]