Rural poverty rates higher than urban rates

The CSO released the latest data on Income and Living Conditions on 26th November. The headline figures indicate a rise in incomes – increasing by 3.5% between 2013 and 2014, which in turn was higher than the figure in 2012. This is in line with other economic indicators such as continuing economic growth, employment growth and decreasing unemployment, all of which suggest that the turnaround in the economy is now well established.

At-Risk-of-Poverty

However, within the same CSO release, the data show that the at-risk-of-poverty rate[1] increased from 15.2% to 16.3% in the same period. It may be that the benefits of the return to growth have yet to ‘trickle down’ and a reduction in poverty rates will be evident in later data. Nonetheless examining the poverty rates over a longer period shows how stubbornly high the poverty rates are.

The chart below shows the at-risk-of-poverty rate between 2004 and 2014, showing urban and rural rates separately. This period was economically very volatile with a ‘boom’ and ‘bust’, ‘full’ employment followed by rapidly rising unemployment.

at risk of poverty rates

Nationally the at-risk-of-poverty rate in 2004 was 19.4% or just under one-fifth of the population. This declined to 14.1% in 2009, before rising again to 16.3% in 2014.

Rural poverty, is often considered more hidden or less visible than urban poverty. Comparing urban[2] and rural areas[3], the at-risk-of-poverty rate has been consistently higher in rural areas over the last 10 years, though there is some evidence that the difference is narrowing. In 2004 the difference in the-at-risk-of-poverty rate between urban and rural rates was 7.5 percentage points, in 2014 it was 4.6 percentage points.

Consistent Poverty

 

The other commonly used measure of poverty, the consistent poverty rate[4] is depicted in the chart below. The trend here shows that nationally between 2005 and 2008, rates were declining from 7% to 4.2% and thereafter rising to 8.2% in 2013, and 8% in 2014, still higher than the rate in 2004.

While the at-risk-of poverty rate has been consistently higher in rural areas compared to urban areas, the rural urban pattern is more erratic when examining the consistent poverty rate. Between 2004 and 2007 there was a higher rate of consistent poverty in urban areas compared to rural. From 2007 to 2013 the rates in both rural and urban areas were rising and roughly comparable. Since 2012 a new trend seems to be emerging where rural rates are rising whereas urban rates are in decline. Since 2013 there may be convergence in rates emerging again, though the rural rate remains higher than the urban rate.

Consistent poverty

The urban-rural patterns poverty rates seem to provide further evidence that the recovery is stronger in urban areas, or at least the impact on poverty reduction is greater there.

The release also provides data on poverty rates at a regional level.  Analysis of consistent poverty rates by region, which will be influenced by rural-urban patterns, shows that the rate for the Border, Midlands and Western region was 10.8% compared with 7.0% for the Southern and Eastern region in 2014. The at-risk of poverty-rate was also higher in the Border, Midlands and Western region compared to the Southern and Eastern region, 20.5% and 14.8% respectively. A previous WDC Insights blog examining CSO Income data (September 25th) titled Regional Disparities are Widening examines regional differences further.

As economic growth continues, it will be important to ensure that the downward trend in poverty rates continues across both rural and urban areas, as well as across all regions. While rural poverty may be less visible, it is no less real and needs to be addressed. It will be important to monitor these trends to see the extent to which they change in 2015 and beyond and to ensure that policy responses are effective in addressing both urban and rural poverty.

Deirdre Frost

[1] The at-risk-of-poverty rate identifies the proportion of individuals who are considered to be in danger of poverty. It is calculated as the percentage of persons with an equivalised disposable income of less than 60% of the national median income.

[2] Urban is defined as centres with a population density greater than 1,000.

[3] Rural is defined as centres with a population density of 999 or less and rural areas in counties.

[4] Consistent poverty is defined as being at-risk-of poverty and living in a household deprived of two of eleven basic deprivation items.