2)     Objectives
Why do poverty rates persist in U.S. metropolitan areas?  Why is there little change in poverty rankings among metro areas during periods of significant economic change? The paper will examine the patterns of poverty rate convergence (and/or divergence) and the formation of convergence “clubs” (e.g. poor and rich metro areas).The paper will consider how local fiscal structure and spending -- specifically local property, income and sales taxes and overall tax burden and spending on public welfare and social services -- affect poverty rates and their persistence in U.S. metro areas. The paper will try to determine the relative importance of local fiscal structure and local spending in affecting poverty rates in metro areas compared to other factors, such as education attainment of residents, race and ethnic composition, industry structure and business costs.

3)     Data/Methods
This paper uses panel data from the U.S. Census Bureau, Bureau of Economic Analysis, Bureau of Labor Statistics, and Tax Foundation and econometric modeling to explore the role of local fiscal structure on poverty in U.S. metro areas.  The dataset used will comprise data between 1990 and 2006.

4)     Preliminary/ Results
Preliminary analysis shows that throughout the last business cycle in the United States poverty rate rankings among metropolitan areas persisted. There was very little change among the 270 largest metro areas in rankings, including the highest poverty areas retaining their poor ranking before, during and after the business cycle.  Moreover, preliminary results also show that education and the industrial structure impact poverty rates and that public policy can have a role in reducing poverty and alleviating its consequences. 

5)     Conclusion
While we know that economic growth can help to reduce poverty, this paper explores the influence of local fiscal structure on poverty persistence in U.S. metropolitan areas.