The Federal Reserve/Brookings Institution study of concentrated poverty in America has been released. To help policymakers plan interventions, the author summarizes the similarities and differences among communities where poverty is 40 percent or higher.Poverty

DeAnna Green

English

Research Papers in Economics

24    Winter 2009
Concentrated
The Federal Reserve/Brookings Institution 
study of concentrated poverty in America   
is  out.1 The  findings  suggest  that  despite 
certain  differences,  census  tracts  with  a   
poverty rate of 40 percent of higher have a 
lot in common.2 The 16 case studies cover a 
range of locations, including former indus-
trial cities like Springfield, Massachusetts, 
rural areas, and Indian reservations. Gen-
erally,  the  rural  case  studies  covered  only 
one census tract, whereas urban case stud-
ies covered more. Brookings and individu-
al Federal Reserve Banks worked together 
to identify understudied communities and 
communities in different settings. (See “The 
16 Communities.”)
The communities were similar in that 
they faced challenges regarding jobs, hous-
ing, education, and the like. But the rea-
sons that poverty became concentrated and 
the initiatives launched to address poverty 
often  differed. The  report’s  authors  hope 
that creating a “nuanced picture of concen-
trated poverty in America” will provide an 
informed starting point for policymakers. 
The National Study
The  researchers  chose  a  descriptive  case-
study  method,  one  that  combined  quan-
titative  data  collection  with  qualitative 
interviews.  Quantitative  data  came  from 
sources such as the U.S. Census, the Bureau 
of  Labor  Statistics,  and  County  Busi-
ness Patterns. Qualitative data came from 
answers to agreed-on questions directed to 
interviewees  and  to  focus  groups  involv-
ing community residents, schools, nonprof-
it organizations, law enforcement officials, 
and other stakeholders. 
Commonalities
Although the reasons poverty became con-
centrated varied, communities shared some 
common elements: for example, isolation, 
demographic  change,  and  lack  of  work-
force readiness. Sometimes the isolation had 
human causes, such as construction of high-
ways and railroads. Other times it had natu-
ral causes. For example, rural communities 
like Martin County and the Blackfeet Res-
ervation,  already  remote  from  population 
centers, were further cut off by mountains. 
In still other cases, segregation caused 
the isolation. The report points to Latinos 
in East Austin, Texas, and African Ameri-
cans  in  Northwest  Milwaukee  and  West 
Greenville, North Carolina, who underwent 
a “forced settlement and/or experienced the 
negative impacts of redlining and exclusion-
ary zoning.” Minorities ended up being cut 
off from the economic development going 
on around them.  
A  second  common  characteristic 
was  demographic  change.  The  research-
ers looked at the 30-year period between 
1970 and 2000 and found that many com-
munities experienced “a rise in immigrant 
households, a rise in single-parent families, 
or both.” Births to unmarried mothers tri-
pled between 1970 and 2000. And in each 
case-study area, the number of single-par-
ent households was higher than in the sur-
rounding area. 
Third, there was a lack of labor force 
readiness and little revitalization or reinven-
tion. Postindustrial cities and rural coun-
ties with economies dominated by coal, for 
example, had serious job losses. 
Addressing AddressingCommunities & Banking    25
by DeAnna Green 
Federal Reserve Bank of Boston
A  final  common  trait  was  the   
incremental nature of communities’ descent 
into  concentrated  poverty,  the  result  of 
trends such as economic restructuring, sub-
urbanization, and public housing policy. 
In  West  Fresno,  downtown  Cleve-
land,  and  East  Austin,  highways  built  as 
part of urban renewal cut off poorer neigh-
borhoods. In Greenville, “thriving African 
American-owned  businesses  were  relocat-
ed … under the guise of ‘urban renewal.’ 
Very few of them survived,” the report says. 
In  Cleveland  an  interviewee  noted,  “The 
Cuyahoga  Metropolitan  Housing  Author-
ity located more than half of the county’s 
public  housing  units  within  the  Central 
Neighborhood.” And Springfield residents 
mentioned  the  location  of  social  service 
and low-income housing agencies in low-
income  neighborhoods—a  situation  not 
only resulting from poverty concentration 
but also tending to intensify it.  
Differences
Among  the  differences  observed  in  areas 
of  concentrated  poverty,  two  stand  out:   
(1) historical experiences (segregation, loss 
of industry, economic restructuring, demo-
graphic change, and combinations of those 
factors) and (2) the economy in the sur-
rounding areas. Although it was not entirely 
possible to separate the two, the report did 
try to consider them individually. 
Both  factors  were  involved  in  the   
immigration  differences  researchers 
observed.  Communities  such  as  Fresno, 
Miami,  and  South  Texas  experienced  an 
influx of the foreign-born over the last sev-
eral  decades—newcomers  that  the  report 
describes as risk-taking and generally hard-
working.  In  the  Little  Haiti  section  of 
Miami, the new families were poorer than 
the  existing  population,  and  their  arrival 
raised  the  poverty  rate.  In  contrast,  rural 
counties saw little immigration. 
Another  historical  factor  responsible 
for differences among case-study communi-
ties was public policy. In Native American 
communities such as the Blackfeet Reserva-
tion in Montana and CrownPoint in New 
Mexico, the potential for economic devel-
opment was hindered by policies on land 
ownership and resettlement. In communi-
ties such as Cleveland, El Paso, and Atlantic 
City, the policies causing poverty concentra-
tion had more to do with assigning public 
housing to specific neighborhoods. 
In addition to those historical factors, 
the report noted the impact of the wider 
economic environment in which communi-
ties existed. Concentrated poverty in strong 
market  areas  (with  their  growing  popu-
lation,  increased  job  opportunities,  high 
demand for houses) is different from con-
centrated poverty in a weak market (char-
acterized by population loss, lack of jobs, 
houses that buyers don’t want). 
East Austin and Little Haiti in Miami 
are located amid strong markets. The City 
of  Austin  saw  house  prices  increase  from 
2000 to 2006, making housing for the poor 
in East Austin less affordable. The same was 
true in the strong market of Miami, where 
there had been a vigorous effort by the city 
to redevelop neighborhoods.
The  challenges  for  the  poor  in 
those  cities  differ  from  the  challeng-
es  in  weak  market  cities  like  Springfield,   
in America in America Poverty26    Winter 2009
Rochester, and Milwaukee. When “there is no   
private [market and] little potential for pri-
vate investment,” residents struggle harder 
to build assets.3 In Springfield, interviewees 
contended that their home values were hurt 
by the weak market and would have been 
more saleable in another part of the city or 
in a different market. 
And  although  the  need  for  jobs  was 
a  common  theme,  the  details  varied.  For 
some rural counties and Native American 
areas, isolation and a complete lack of eco-
nomic diversity created the worst employ-
ment situation. 
But in postindustrial cities like Spring-
field, Rochester, and Cleveland, the report 
noted  the  existence  of  jobs  in  “advanced 
manufacturing,  higher  education,  health 
care, and financial services”—a consolation 
to the cities as they worked to replace man-
ufacturing jobs, but not much consolation 
to unskilled workers.
Hence, although Springfield is home to 
a growing health-care sector anchored by a 
hospital, inner-city residents who have jobs 
in health care are employed in the lower-
wage occupations.4 In spite of the mismatch 
between available jobs and trained workers, 
The 16 Communities
The following communities were the focus of the case studies on concentrated 
poverty in America:
Fresno, California: West Fresno neighborhood
Cleveland, Ohio: Central neighborhood
Miami, Florida: Little Haiti neighborhood
Martin County, Kentucky
Blackfeet Reservation, Montana
Greenville, North Carolina: West Greenville
Atlantic City, New Jersey: Bungalow Park/Marina District
Austin, Texas: East Austin neighborhood
McKinley County, New Mexico: Crownpoint
McDowell County, West Virginia
Albany, Georgia: the East Albany neighborhood
El Paso, Texas: Chamizal neighborhood
Springfield, Massachusetts: Old Hill, Six Corners, and the South  
End neighborhoods
Rochester, New York: Northern Crescent neighborhoods
Holmes County, Mississippi
Milwaukee, Wisconsin: Northwest neighborhood
Springfield, Massachusetts, photographs: Kai-yan LeeCommunities & Banking    27
Springfield  is  better  positioned  than,  say, 
rural  McDowell  and  Martin  counties.  At 
least there is some nearby economic activity 
on which to build. 
A Good Starting Point
The report is designed to help policymakers 
understand concentrated poverty and think 
about ways to address the issues. 
For example, schools could use more 
attention.  As  early  as  elementary  school, 
students  living  in  concentrated  poverty 
underperformed on standardized tests when 
compared with students in their larger met-
ro region. (The only exception was Fresno.) 
Moreover, in nearly every case study at least 
40 percent of the adult population lacked 
a high school diploma, which hurt efforts 
to build a skilled workforce and to combat 
unemployment. 
The study found that the more collab-
oration there was between schools, families, 
and other stakeholders, the more that local 
initiatives  were  successful.  In  Springfield, 
for example, an elementary school joined 
with Springfield College to create an ongo-
ing initiative, the Springfield Partners Pro-
gram. The program matches students with 
mentors  who  help  with  everything  from 
homework to extracurricular activities. Stu-
dents dine with their mentors at the college 
each week. And someone from the college 
takes them home, where a parent is required 
to be present. 
The Federal Reserve Bank of Boston 
focused on Springfield, but its collaboration 
with  researchers  around  the  country  pro-
duced insights that enriched overall under-
standing  of  concentrated  poverty.  The 
report should help policymakers formulate 
solutions that take into account the factors 
that are common in communities with con-
centrated poverty as well as the factors that 
depend on locale. 
DeAnna  Green  is  the  senior  community   
affairs  analyst  at  the  Federal  Reserve  Bank   
of Boston.
Endnotes
Concentrated Poverty: Observations from Communities 
1 
Across  the  U.S.  (Washington,  DC:  Federal  Reserve 
System, 2008).
DeAnna  Green,  “Understanding  Concentrated 
2 
Poverty,” Communities & Banking 18, no. 4 (fall 2007): 
24-25.
Peter  Gagliardi,  “Incentives  for  Urban  Pioneers,” 
3 
Communities & Banking 18, no. 3 (summer 2007): 
3-4.
Paul N. Foster et al., 
4  A Demographic and Economic 
Analysis  of  the  City  of  Springfield  (West  Springfield, 
Massachusetts: Pioneer Valley Planning Commission, 
2006).
Fresno
El Paso
Austin
Holmes County
Crownpoint
Blackfeet Reservation
Miami
McDowell County
Greenville
Albany
Martin County
Cleveland Atlantic City
Milwaukee
Rochester Springfield
Concentrated Poverty in America
Less than 10 percent
10-20 percent
20-40 percent
more than 40 percent
Source: U.S. Census, 2000
Percent of Population in Poverty
This Communities & Banking article is copyrighted by the Federal Reserve Bank of Boston. The views expressed are not necessarily those of 
the Bank or the Federal Reserve System. Copies of articles may be downloaded without cost at www.bos.frb.org/commdev/c&b/index.htm.

Addressing concentrated poverty in America

http://www.bostonfed.org/commdev/c&b/2009/winter/DeAnna_Green_concentrated_poverty.pdf

Addressing concentrated poverty in America

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