Rural

Employment

At A 

Glance

United States Department of Agriculture

Economic Research Service

Economic Information Bulletin Number 21

December 2006

Many Americans envision rural America as being heavily agricultural.

Indeed much of the land area of rural America is devoted to 

agricultural uses. However, only a small portion of the jobs in rural

and small-town America are in the agricultural sector, and this portion has 

continued to decline in recent decades. Farm jobs fell from 12.4 percent of 

nonmetro jobs in 1976 to 6.2 percent by 2004. 

The manufacturing sector employs nearly twice as many nonmetro workers

as the farm sector does. More than a third of nonmetro employment is found in

manufacturing-dependent counties, but the importance of nonmetro 

manufacturing has declined over time. In contrast, there has been sharp growth

in the employment shares of nonmetro retirement-destination or recreation

counties. (Data on nonmetro areas are used in this report to describe rural and

small-town America. The definitions of metro and nonmetro areas are discussed

in the section on data sources at the end of this report.) 

In 2005, nonmetro America accounted for about a sixth of U.S. 

employment, or nearly 23 million workers. The nonmetro share of employment

has declined markedly in recent decades, but the decline primarily reflects the

reclassification of many growing nonmetro counties as metro counties. 

The nonmetro unemployment rate has generally moved over time in the

same way that the metro rate has but at a higher level. As nonmetro areas have

become more economically diverse since the 1990’s, the metro-nonmetro 

difference in the unemployment rate has diminished. As with metro areas, the

nonmetro unemployment rates among minorities and teenagers remain much

higher than the overall rate. 

Nonmetro earnings per nonfarm job were $31,582 in 2004, compared with

$47,162 in metro areas. In contrast to the declining unemployment rate gap, the

metro-nonmetro gap in nonfarm earnings has expanded over time. Nonmetro

earnings in 2004 were 67 percent of metro earnings, compared with 81 percent

in 1979. Some of the metro-nonmetro difference in earnings can be attributed to

differences in occupational mix. Nonmetro areas have a lower proportion of jobs

in higher paying professional and managerial occupations and a higher 

proportion in lower paying blue-collar occupations than do metro areas.

Percent change from previous year 

1977 80 83 86 89 92 95 98 01 04 

Metro and nonmetro employment growth rates, 1976-2005

6

4

2

0

-2

Note: The metro and nonmetro definition used in this report is based on the June 2003 OMB

classification except where noted.

Source: Calculated by ERS using data from the Bureau of Labor Statistics.

Metro

Nonmetro
Nonmetro Share of U.S. Employment Declining

Nonmetro America accounted for 16.1 percent of U.S. employment, or close to 

23 million workers, in 2005. The nonmetro share of employment was down markedly from

that of 1976, when nonmetro counties accounted for 26.6 percent of U.S. employment.

The apparent decline in the nonmetro share of employment primarily reflects the 

reclassification of many growing nonmetro counties as metro counties. The share of 

employment in counties that were considered metro in both 1976 and 2005 changed little.

These counties accounted for 73 percent of U.S. employment in 1976 and 74 percent in 2005.

However, counties considered nonmetro in 1976 and metro in 2005 accounted for an 

additional 10 percent of 2005 U.S. employment. These counties grew faster than either 

continuously metro or continuously nonmetro counties. In all, employment in these counties

has grown by 93 percent since 1976, when they accounted for 8.3 percent of national

employment. Many of these counties were on the rapidly growing fringes of existing 

metro areas; others were centered on smaller urban cores that attained metro status

due to rapid growth.

Metro and Nonmetro Employment 

Growth Rates Nearly Converge

Employment has grown over time in both metro and nonmetro areas. Between 1976 and 2005, employment in counties

that are currently nonmetro (that is, nonmetro in 2005 no matter what they were in 1976) grew by 37 percent, while employment in counties that are currently metro grew by 65 percent. 

However, by splitting this period into two roughly equal shorter periods, we observe that

the growth rates of currently metro and nonmetro counties were quite different in the first

period (1976-90), while in the second period (1991-2005), they nearly converged. Between

1976 and 1990, employment in currently metro counties grew at an annual average rate of

2.3 percent, compared with the rate of 1.2 percent in currently nonmetro counties. Since

1990, the metro employment growth rate fell to 1.2 percent per year, while the nonmetro rate

fell slightly to 1.0 percent per year.

Sectoral employment trends in recent years have favored service-producing industries

that are more heavily represented in metro areas. The success of nonmetro counties in 

keeping pace with metro employment growth rates suggests that nonmetro areas have 

narrowed their locational disadvantages in attracting jobs within these growing industries.

West Has 

Fastest Nonmetro

Employment Growth

Nonmetro employment growth varies by

region, and regional growth rates have varied

over time. During 1976-90, annual growth

rates ranged from 0.7 percent in the Midwest

and 1.2 percent in the South to 1.6 percent in

the Northeast and 2.1 percent in the West.

During 1990-2005, the West continued to

lead in employment growth with an average

annual rate of 1.9 percent. Nonmetro 

growth rates in the Northeast, the Midwest,

and the South converged in the 0.8- to

1.0- percent range.

Rural Employment At A Glance

Employment growth, 1976-2005, by 1976 and 2005 metro county status

Metro in 1976 and 2005

Nonmetro in 1976 and 2005

Nonmetro in 1976 and metro in 2005

Metro in 1976 and nonmetro in 2005

Total

625

2,021

464

22

3,132

Employment

Number

of counties

Employment

1976 2005

Share of

U. S.

employment

Share of

U. S.

employment

Change,

1976-

County type 2005

Source: Calculated by ERS using data from the Bureau of Labor Statistics. 

64,775.5

16,207.3

7,363.4

394.8

88,741.0

104,717.1

22,124.7

14,194.8

670.9

141,707.5

73.0

18.3

8.3

.4

100.0

73.9

15.6

10.0

.5

100.0

61.7

36.5

92.8

70.0

59.7

Number Thousands Thousands Percent - - - Percent - - -

Northeast

1.6

0.8 0.7

0.9

1.2

1.0

2.1

1.9

Midwest South West

Percent 

Nonmetro average annual employment 

growth rates by region, 1976-1990 

versus 1990-2005

2.5

2

1.5

1

0.5

0

Source: Calculated by ERS using data from the Bureau 

of Labor Statistics.

1976-90 1990-2005
At the county level during 1990-2005, employment losses occurred in much of North

Dakota, in portions of western Kansas, eastern Montana, and much of western Texas. Many

nonmetro counties in portions of the Southern States, including Alabama, Mississippi,

Louisiana, and Arkansas, also lost employment during this period. 

Other notable trends include strong nonmetro employment growth in much of the West

and in recreational areas of some Midwestern States, such as Michigan, Wisconsin, and

Minnesota. Strong growth can also be seen in nonmetro areas of the fast-growing States of

Texas and Florida and in nonmetro counties in northern Georgia and adjoining areas.

Nonmetro Employment Falls 

in Farming and Manufacturing, 

Grows in Retirement and Recreation Counties

Agricultural jobs in rural and small-town America fell from 12.4 percent of nonmetro jobs

in 1976 to 6.2 percent of nonmetro jobs in 2004. Along with this drop has been a relative

decline in overall employment in areas that depend the most on farming: While counties 

currently classified as farming dependent accounted for more than 8 percent of nonmetro

employment in 1976, these same counties accounted for 6.6 percent of nonmetro 

employment by 2005. Overall employment growth in these counties was slow, as substantial

drops in farm employment largely offset moderate growth in nonfarm employment.

The manufacturing sector employs far

more nonmetro workers than the farm 

sector does. Hence, manufacturing-dependent counties are more numerous and have

more jobs than farming-dependent counties

do. In 2005, manufacturing accounted for

about 11.9 percent of all nonmetro jobs, but

this share is down sharply from 19.4 percent of jobs in the same counties in 1976.

About 13-15 percent of the decline can be

attributed to a change in industry classification systems between 2000 and 2001, but

the remainder reflects the long-term decline

in the share of employment in manufacturing nationwide. More than one-third of nonmetro employment is found in counties that

are considered manufacturing dependent.

This share has also declined slightly over time. However, in counties currently considered

manufacturing dependent, stable or declining manufacturing employment has been largely

offset by growth in nonmanufacturing employment.

In contrast, employment in nonmetro retirement-destination or recreation counties has

increased sharply. Many counties belong to both county types; counties that belonged to one

or both types accounted for more than 24 percent of nonmetro employment by 2005. Both

county types benefit when tourists, part-year residents, and retirees spend income earned

elsewhere on local goods and services. Many of these counties have also grown by attracting

entrepreneurs and leaders of “footloose” businesses who seek a high quality of life for themselves and their staffs, which can be provided by natural and recreational amenities.

Rural Employment At A Glance

Manufacturing

36.836.6

34.8

8.1 7.0 6.6

13.516.5

11.914.216.7

10.9

Farming Retirement Recreation

Percent 

Employment shares of nonmetro

county types, 1976-2005

50

40

30

20

10

0

Note: Share of employment for all years is based on the 

2004 ERS County Typology Codes.

Source: Calculated by ERS using data from the Bureau of 

Labor Statistics.

1976

1990

2005

Nonmetro employment change, 1990-2005

Source: Calculated by ERS using data from the Bureau of Labor Statistics.

Metro

Employment loss

Employment gain up

to 20 percent

Employment gain more

than 20 percent
Nonmetro and Metro Unemployment Rates Similar

The job picture for both nonmetro and metro areas improved in 2005, as unemployment

rates dropped to their lowest levels since the 2001 recession. Unemployment stood at 

5.4 percent (1.3 million people) in nonmetro areas and 5.0 percent in metro areas 

(6.3 million people), both down slightly from 2004 levels. Although both metro and 

nonmetro unemployment rates remain above pre-2001 recession levels, they were the 

lowest since 2001.

Metro and nonmetro unemployment rates have generally moved together throughout the

business cycle, although nonmetro unemployment is higher. During the 1970’s, a greater 

concentration of jobs in natural resource-based industries, such as farming and mining,

helped keep nonmetro unemployment rates closer to metro rates. In the 1980’s, this 

specialization in natural resource-based and manufacturing employment resulted in higher

nonmetro unemployment rates. In recent decades, the nonmetro economy has become more

diversified and unemployment rates have moved closer to metro rates. 

The nonmetro jobless rate rose from 2001 through 2003 and fell slightly in 2004. 

The pre-recession nonmetro unemployment rate was 4.4 percent in 2000, the lowest

since 1973. 

Official unadjusted unemployment rates may underestimate the full extent of 

employment difficulties by excluding marginal and underemployed workers. 

The adjusted unemployment rate in nonmetro areas was 9.6 percent in 2005, compared

with 8.8 percent in metro areas. The adjusted unemployment rate includes marginal

workers (those who want to work and are available, but not currently looking) and 

half of those who are employed part-time, but would like to work full-time. 

The proportion of the working 

age population employed was 78.7 

percent for nonmetro people ages 

25-54 in 2005, compared with 79.4

percent for metro people. The employment-to-population ratio is an 

indicator of the overall tightness of a

labor market. A high employmentto-population ratio indicates that more

workers support the population. The

nonmetro employment-to-population

ratio has consistently been lower than

the metro ratio.

While metro and nonmetro 

unadjusted unemployment rates were

almost identical in 2005, rates among 

different racial and ethnic groups and

across regions were considerably different. 

Unemployment Highest for Youth and Minorities 

Minorities and teens have the highest unadjusted jobless rates in both metro and 

nonmetro areas. For many of these groups, jobless rates have remained at post–recession

peaks or have fallen slightly. For nonmetro Blacks, the unemployment rate in 2005 was 

12.1 percent (adjusted 19.3 percent); for Hispanics, 6.1 percent (adjusted 12.7 percent); 

and for all teenagers, 16.9 percent (adjusted 24.7 percent). 

Rural Employment At A Glance

1973 76 79 82 85 88 91 94 97 00 03

Nonmetro

Metro

Percent

Metro and nonmetro unemployment

rates, 1973-2005

12

8

4

0

Note: Metro and nonmetro definition changes occurred in

1985, 1994, and 2005.

Source: Calculated by ERS using data from the Current

Population Survey.

White

4.7 4.3

8.6

7.8

12.1

9.8

19.3

15.4

6.1 6.0

12.7

11.6

16.916.5

24.7 24.4

5.4 5.0

9.6 8.8

Black Hispanic Teens Total

Percent unemployed

Unemployment by race/ethnicity and youth, 2005

30

23

15

8

0

Note: The adjusted unemployment rate includes people who want to work and are available but are neither currently 

working nor looking for work and half of part-time workers who want and are available for full-time work.

Source: Prepared by ERS using Current Population Survey data from the Bureau of Labor Statistics.

Nonmetro 

unadjusted

Nonmetro 

adjusted

Metro 

unadjusted

Metro adjusted
Unemployment Highest in the South

Nonmetro unemployment rates vary significantly by region, with the highest rates in the

South (6.0 percent) and West (5.5 percent), followed by the Midwest (5.4 percent) and the

Northeast (4.9 percent). 

The highest nonmetro unemployment rates in 2005 were concentrated in the Mississippi

Delta (Mississippi, Louisiana, and Arkansas), the Northwest (Washington, Oregon, and

northern California), Alaska, Appalachia, and parts of northern Michigan. The lowest

unemployment rates were generally found in the Midwest (Kansas, Nebraska, and Iowa). 

Some nonmetro counties have both high unemployment and rapid employment growth.

In small counties with high unemployment, an increase in the number of jobs can lead to

a high growth rate but little change in the unemployment rate. This situation can also

occur in high job growth areas that attract people looking for work. 

Nonmetro areas with large Black, Native American, and Hispanic populations continued

to experience above-average unemployment rates. 

Many areas with high unemployment rates also have low educational attainment levels as

well as a lack of employment opportunities. 

Metro-Nonmetro Earnings Gap Expanding 

In nonmetro areas, average earnings per nonfarm job are lower than in metro areas. In

2004, nonmetro workers averaged $31,582 per nonfarm job, compared with $47,162 in metro

areas. This metro-nonmetro earnings gap has been expanding over time. In 1969, nonmetro

earnings were 76.9 percent of metro earnings; by 2004, the share had dropped to 67 percent.

The gap was smallest in 1979 when nonmetro nonfarm earnings were 80.9 percent of metro

earnings. Differences in the cost of living, multiple jobholding, and the occupational structure

of metro and nonmetro areas are some of the factors associated with this gap in earnings.

After we adjust for inflation, we find that nonmetro earnings per nonfarm job have 

fallen since they peaked in 1979. Earnings dropped from $32,518 in 1979 to $31,582 in 2004.

Metro earnings steadily increased, rising

from $40,230 to $47,162.

ERS has estimated that it costs about

16 percent less on average to live in a

nonmetro county than in a metro

county. Nonmetro earnings on average

have been 25.5 percent lower than

metro earnings. 

In 2004, 7.3 percent of nonmetro

workers held more than one job, 

compared with 5.5 percent of metro

workers. Also, a higher percentage 

of part-time workers are seeking 

full-time work. 

Rural Employment At A Glance

1969 73 77 81 85 89 93 97 01 03

Metro

Nonmetro

Nonmetro as a

percent of metro

Constant 2004 dollars ($1,000) Metro = 100 percent

Earnings per nonfarm job, 1969-2004

50

44

38

32

26

20

85

80

75

70

65

60

Source: Calculated by ERS using data from the Bureau of

Economic Analysis.

Nonmetro unemployment rates, 2005

Note: U.S. average 5.1 percent.

Source: Calculated by ERS using data from the Bureau of Labor Statistics.

Up to or below

5.1 percent

5.2 to 7.7 percent

Over 7.7 percent

Metro areas
The metro-nonmetro gap in nonfarm earnings per job can also be partly explained by the

higher percentage of metro jobs in professional and managerial occupations.

The proportion of nonmetro workers in higher paying professional and managerial 

occupations is 9.3 percentage points less than in metro areas. At the same time, a greater

share of nonmetro employment is in lower paying blue-collar occupations. Jobs that require

more education are more concentrated in metro areas. 

The U.S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, age, 

disability, and, where applicable, sex, marital status, familial status, parental status, religion, sexual orientation, genetic information, political beliefs,

reprisal, or because all or a part of an individual's income is derived from any public assistance program. (Not all prohibited bases apply to all programs.)

Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact

USDA's TARGET Center at (202) 720-2600 (voice and TDD). 

To file a complaint of discrimination write to USDA, Director, Office of Civil Rights, 1400 Independence Avenue, S.W., Washington, D.C. 20250-9410 or call

(800) 795-3272 (voice) or (202) 720-6382 (TDD). USDA is an equal opportunity provider and employer.

The Cost of Living and the Distribution of Poverty, by Dean Jolliffe. USDA, 

ERR-26, September 2006, available at: www.ers.usda.gov/Publications/ERR26/

Recreation, Tourism, and Rural Well-Being, by Richard J. Reeder and Dennis M.

Brown. ERR-7, August 2005, available at: www.ers.usda.gov/Publications/err7/

And additional readings recommended at: www.ers.usda.gov/Briefing/

LaborAndEducation/ 

More Research on Rural Employment at ERS . . .

This report draws on the research of ERS’s Resource and Rural Economics

Division. Data in this analysis come from 1976-2005 Local Area Unemployment

Statistics (LAUS), Bureau of Labor Statistics; the Bureau of Economic Analysis (BEA);

and the Current Population Survey (CPS), U.S. Census Bureau.

Data Sources

ERS Website and Contacts

Rural Employment At A Glance

Economic Research Service

Information on rural employment can be found at the ERS website at

www.ers.usda.gov/Emphases/Rural. For more information, contact: Lorin D. Kusmin

at lkusmin@ers.usda.gov, 202-694-5429 or Timothy Parker at tparker@ers.usda.gov,

202-694-5435

Nonmetro Metro

Metro and nonmetro employment by occupation, 2005

Source: Calculated by ERS using data from the 2005 March Current Population Survey.

22.1

7.2

4.4

23.3

16.8

26.2

Service

Sales and office occupations

Farming, fishing, and forestry

Professional and managerial

Construction and extraction

occupations

Other blue-collar occupations

15.6

6.0

0.8

25.9

16.2

35.5

What Is Rural?

Metropolitan (metro) and Nonmetropolitan (nonmetro) areas are defined by the

U.S. Office of Management and Budget (OMB). The data in this report, except where

noted, are based on OMB’s 2003 definition of metro and nonmetro areas. For more

information, go to: www.ers.usda.gov/Briefing/Rurality/.

What Are County Types?

County Typology Codes, developed by ERS in 1989 and updated in 2004, 

classify metro and nonmetro counties based on primary economic activity and 

social characteristics. For more information, go to: www.ers.usda.gov/Briefing/

Rurality/Typology/. 

Definitions

Photos courtesy of USDA.