Why is the American South Poorer?

Although economic inequality and uneven development exist across the United States, poverty has historically been higher in the South. Accordingly, this study investigates the relative contributions of four theoretical explanations in understanding the higher poverty in the South relative to the Non-South: 1) family demography, 2) economic structure, 3) race composition, and 4) power resources. The four most recent U.S. waves (2000, 2004, 2007, and 2010) from the Luxembourg Income Study (LIS) provide the individual-level data for this study. The LIS sample of 734,134 individuals is nested in rich economic, political, and racial data on U.S. states. Utilizing multiple analytic strategies, including mixed multi-level linear probability models and non-linear variance decomposition techniques, I analyze state-of-the-art measures of relative and anchored poverty. I also employ two measures of the South—one defined by the U.S. Census Bureau (“South”) and the other as the former states of the Confederacy (“Confederate South”). Multi-level linear probability models of poverty show economic structure and power resources most reduce the effect of residence in the South and the Confederate South, respectively. Decomposition results indicate economic structure and power resources equally explain the largest share of the poverty difference between the South and the Non-South. However, power resources explain the largest portion of the poverty difference between the Confederate South and the Non-Confederate South. Though family demographics and, to a lesser extent, race explain very little of the poverty difference for both the South/Non-South and the Confederate South/Non-Confederate South, race is of greater significance for the Confederate South/Non-Confederate South. These results highlight the meaningful role of political and economic contexts in furthering our understanding of regional poverty trends. This study also underscores the importance of place characteristics in influencing individual outcomes and shaping patterns of inequality.

Regina S. Baker is a Ph.D. candidate in Sociology at Duke University, North Carolina, and has been a research fellow at the WZB.