Shifting Rurality: Is It Possible to Increase Population and Become More Rural?

In January, the U.S. Department of Agriculture's Economic Research Service (USDA-ERS) released the 2023 update of the Rural-Urban Continuum Codes (RUCCs), resulting in changes for many counties, including those in the Fifth District. The USDA-ERS developed the nine-code classification system in 1974 to identify a county's level of rurality based on its degree of urbanization and adjacency to a metro area: RUCC 1 is the least rural, and RUCC 9 is the most rural. Following each decennial census, the USDA-ERS does a full update of the RUCCs to reflect population and metro/nonmetro area changes. The RUCCs are often used by research organizations, including the Richmond Fed, to analyze trends for urban and rural areas at the county level. (See "Introducing Rural Spotlights.") Following the 2023 RUCC update, nine counties in the Fifth District became more urban, and 61 became more rural. Does this mean the district is becoming more rural, or are there other factors? This post explores the changes since the last RUCC update in 2013, and the implications of these changes on how we view rural and urban parts of the district.

The 2023 RUCC Update: What's Changed Since 2013

To understand the changes between the 2013 and 2023 RUCCs, it is first important to understand how they are calculated. The USDA-ERS incorporates several data inputs in the construction of the RUCCs — most importantly, the Office of Management and Budget's (OMB) Core-Based Statistical Areas (CBSAs) — which establishes metropolitan and micropolitan delineations using census population data and commuting pattern data from the American Community Survey (ACS). CBSAs are reviewed for updates annually, every five years, and every 10 years, with the most significant changes happening following the decennial census.

One important piece of data that the OMB incorporates into their CBSA delineations is the census definition of urban areas, which were updated in 2020 with two significant changes: 1) the primary unit for measuring density changed from population density to housing density, and 2) the population threshold for what qualifies as an urban area increased from 2,500 to 5,000, resulting in fewer urban areas and less overall land area falling into an urban area category. (For more information on the changes to the 2020 urban area criteria, see "Updates to Rural and Urban Areas Based on the 2020 Census.") The largest definitional change between the 2013 and 2023 RUCCs derives from the reclassification of urban areas. These changes affected counties in RUCC 6-9 by shifting the population intervals. (See table below.)

How Did These Changes Affect the Fifth District?

For the purpose of comparing trends in urban versus rural/small town areas, the Richmond Fed classifies counties into two groups: RUCC 1-2 are considered urban, and RUCC 3-9 are considered rural/small town, which varies slightly from the definition used by the USDA-ERS. Within the Fifth District, there were changes in the number of counties in each RUCC as well as changes in the share of population in each RUCC. (See charts below.)

The split between the number of urban and rural counties stayed broadly consistent, with 60 percent of counties being rural in 2013 compared to 61 percent in 2023. However, the share of the district population living in an RUCC 3-9 county declined. Using 2010 population data and the 2013 RUCC definition, the share of people who resided in a rural county was 26.8 percent, but this share has decreased to 25.6 percent in 2020 with the 2023 rural definition. Over 220,000 fewer people now live in a county defined as rural. This shift toward urban areas is also present at the national level: 24.1 percent of people lived in an RUCC 3-9 county in 2010 versus 22.6 percent in 2020. Within rural counties, there was a large increase in the number of RUCC 8-9 counties and a decrease in the number of RUCC 6-7 counties. (See maps below.)

Of the nine counties that became more urban, six were incorporated into a CBSA. For example, despite losing nearly 20 percent of its population between 2010 and 2020, Anson County, North Carolina, went from an RUCC 6 to an RUCC 1 because it became an outlying county within the Charlotte-Concord-Gastonia NC-SC Metropolitan Statistical Area (MSA). This shift is likely due to the increase in the share of Anson residents commuting into central counties of the Charlotte MSA. The absorption of Anson into the CBSA then had a ripple effect on the classification of neighboring counties. For example, Anson's shift resulted in the RUCC of Richmond County, North Carolina, decreasing from a 5 to a 4 because it became adjacent to the Charlotte MSA. (See maps below.)

On the flip side, 10 of the counties that became rural or became more rural were removed from CBSAs. One example is Caroline County, Virginia, which shifted from an RUCC 1 to an RUCC 8 because the county dropped out of the Richmond VA MSA in 2018, despite seeing the population increase. (See map below.) One potential explanation for this might be a change in commuting behavior: Between 2015 and 2022, the share of workers commuting out of Caroline County decreased from 65.6 percent to 61.2 percent. Over the same period, the percentage of Caroline County residents who work from home more than doubled from 3.6 percent to 7.7 percent.

For many of the other counties that became more rural, changes to the census definition of urban areas may explain the shift. For example, Essex County, Virginia, a county that borders Caroline County, Virginia, shifted from an RUCC 6 to an RUCC 8 despite only losing about 1,000 residents from 2010 to 2020. (See map below.)

Implications

As noted earlier in this post, the primary use of the RUCCs is to help inform research by offering a way to study population and metro density trends as well as things like employment and education in more rural versus more urban areas. On the one hand, these codes are not used directly to determine federal funding for rural or urban projects. On the other hand, these codes support the research that determines rural classifications, which can be used in policy decisions that can directly impact communities. As new data comes out, we may need to consider how remote/hybrid work arrangements affect commuting behaviors and consequently OMB delineations. Because the 2023 RUCCs utilize commuting pattern data from the 2016-2020 five-year estimates from the ACS, the data do not accurately reflect post-pandemic commuting conditions. The anticipated drop in commuting behaviors may cause outlying counties to drop out of CBSAs if there are no changes to definitional changes in commuting patterns. These changes will not be fully reflected until the 2028 CSBA update and the 2033 RUCC update. While these definitional changes may seem small, they play a large role in the way we think about rural and urban areas in our district.

Views expressed are those of the author(s) and do not necessarily reflect those of the Federal Reserve Bank of Richmond or the Federal Reserve System.