Transfer Payments As a Proportion of Total Personal Income 1991-2001
More About Transfer Payments
Transfer payments are counted as a part of personal income for those persons who receive that form of income because they are "entitled" to transfer payments. Many people refer to transfer payments as "entitlements". That is an appropriate description because persons who, for reasons such as their older age, low income, military service, etc., are "entitled" receive payments. The largest and best-known transfer payments are Social Security and Medicare and Medicaid. Medicare payments are made to health care providers on behalf of persons who are entitled because they have reached age 65. On the other hand, Medicaid pays for health care services for eligible children and families who are "entitled" because of their low income.
As shown in Table 1, total transfer payments paid in Missouri were $18.32 billion in 1991. By 2001 transfer payments received by Missourians had increased to $24.40 billion. That is an increase of 33.2 percent, well above the 27.8 percent increase in Missouri total personal income from 1991 to 2001. As a result of that large increase, transfer payments, which accounted for 14.7 percent of Missourians' total personal income in 1991, grew to account for 15.3 percent of Missouri total personal income in 2001.
Of the $24.40 billion in transfer payments received by Missourians in 2001, about $9.78 billion (40%) was allocated to those entitled to Social Security retirement and disability payments. Also included in that total is $280 million paid to those Missourians entitled to Railroad Retirement. Another major component of transfer payments in 2001 was to those Missourians entitled to medical coverage. Medical transfer payments totaled $10.29 billion (42.2% of the total) in 2001. Of those payments, Medicare accounted for $5.27 billion and Medicaid payments accounted for $4.98 billion.
To a great extent, it was the very large increase in medical costs that was most responsible for the disproportionately large increase in transfer payments being made to Missourians during the 1990s. Medical transfer payments in 1991 totaled $6.44 billion; by 2001 government medical payments made to Missourians had increased to $10.29 billion - a 59.80 percent in constant dollars. That is an increase more than twice the increase in total personal income in Missouri from 1991-2001.
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Other Components of Transfer Payments
Of the $24.40 billion in Missouri transfer payments in 2001, Social Security payments accounted for 40.1 percent of the total and medical payments accounted for 42.2 percent. Those entitlements combine to account for 82.2 percent of the total (Chart 1). Other categories of transfer payments and their amount in 2001 were: (1) income maintenance: includes SSI, Temporary Assistance to Needy Families (TANF), food stamps, etc. Payments of $1.90 billion were made in this category in 2001 (7.7 percent of total); (2) unemployment insurance benefits: payments totaled $478.8 million in 2001 (2.0 percent of total). Unemployment payments were comparatively very low in 1999-2000 but began to increase by 2001; (3) veterans benefit payments: includes pensions, insurance, disability, etc. Payments totaled $527.4 million in 2001 (2.2 percent of total); (4) Federal Education and training assistance payments: total $259.1 million in 2001 (1.1 percent of total).
The total of the above payments accounts for 95 percent of transfers. These are government payments made to entitled individuals. The other five percent consists primarily of payments to nonprofit institutions that provide related services.
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Transfer Payment Income to Missouri Counties and Regions 1991-2001
As displayed on Map 1, transfer payment income increased in all Missouri counties from 1991 to 2001. Transfer payment income however declined in St. Louis City from 1991-2001.
As described above, transfer payment income in Missouri increased by 32 percent from 1991 to 2001 and increases in most counties were correspondingly large. There were 15 counties in which transfer payment income increased by more than 55 percent (in constant dollars) from 1991 to 2001.
Map 1 shows, however, that the increases were relatively great throughout southern Missouri and the metropolitan areas but, by comparison, increases were much smaller throughout rural north Missouri. To an important degree these different levels of increase among the counties reflect changes during the 1990s in the size of the "entitled" population in each of the counties. As discussed in the Regional Profile section on changes in the population by age, the population between age 65 and 85 declined in most rural north Missouri counties during the 1990s. As the size of the "entitled" population declined so did the amount of transfer payment income in those counties during that decade.
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Map 1 shows that 22 of the 29 counties in which transfer payment income increased by less than 25 percent between 1991 and 2001 were located in rural north Missouri. The implications for the local economies in north Missouri counties and retention of health care services in that region are important because, as indicated by Map 2 and Table 2, in 17 of the counties in rural north Missouri transfer payments accounted for more than 25 percent of total county personal income. Transfer payments have become very important to the economy of the region but the magnitude of those payments is becoming relatively smaller because of the recent decline of the entitled population.
As described above, transfer payments have become an important part of Missouri income - 15.3 percent of total personal income in 2001. However, in many smaller population counties the contribution of transfer payments to total county income is much greater. As reported in Table 2 and displayed on Map 2 there are 84 Missouri counties in which transfer payments accounted for more than 20 percent of county total personal income in 2001. Of those 84 counties, there are 21 in which transfer payments account for more than 30 percent of county total personal income. Wayne County in the southeast Ozarks leads the state with 43.6 percent of its total personal income derived from transfer payments. Wayne is followed closely by adjoining Reynolds and Ripley Counties in which 40.7 and 40.4 percent of income, respectively, is derived from transfer payments.
The table and map also show that transfer payments make the smallest percentage contribution to total county personal income in the larger and more affluent counties. Typical of those counties in 2001 are Platte (7.7 percent of income from transfer payments), St. Charles (9.0 percent), St. Louis County (9.6 percent), Clay (10.7 percent) and Boone (11.7 percent). However, transfer payment income has been increasing in each of those counties. The dollar amount of transfer payment income more than doubled between 1991 and 2001 in Platte, Cass, Jefferson, St. Charles and Boone (as well as several other larger and more affluent counties), but total personal income more than doubled in those counties as well, leaving transfer payments at about the same percentage of income as in 1991.
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OSEDA Regional Grouping of Counties Many demographic factors vary by region within the state of Missouri. For the convenience of our user community, OSEDA prepares tables using three different regional groupings of counties: Extension, Economic Development and Transportation. For each of these groupings, one table summarizes the indicators by regional total and a second table shows values for each county grouped by region. Users may select the county grouping most helpful for their application and understanding. |
Changes in Transfer Payments from 1991-2001 by Region
University of Missouri Extension Regions
Table 3 reports the total value of transfer payment income for each of the eight University of Missouri Extension Regions. In tables that follow, the value of individual transfer payment income for each of the counties in the region is reported as well as a regional total.
Regional variation in characteristics of the population that are linked to entitlements is reflected in the magnitude of difference in transfer payments as a percent of total personal income as indicated on the right hand columns of Table 3.
Because the East Central Region has the largest population among the regions, it also had the largest income derived from transfer payments in 2001 ($8.87 billion). But, because the East Central Region also has the highest population and the highest total personal income among the regions, transfer payments in East Central account for only 12.3 percent of East Central total personal income in 2001. That is the smallest percentage among the eight regions.
The situation is similar in the West Central Region. West Central has the second largest population and second highest total personal income among the regions. Correspondingly, total transfer payments received by the West Central public was $4.79 billion in 2001, well behind the East Central Region but far above any of the remaining six. But, because of generally higher income in the West Central Region, transfer payments only accounted for 13.8 percent of region total personal income in 2001
At the other extreme, from the St. Louis and Kansas City dominated regions, there were three extension regions in which transfer payments accounted for more than 23 percent of regional total personal income in 2001. Highest among those regions was the Southeast Region that, not only has a relatively small population, but also has a higher percentage of low-income households than any of the other regions. Transfer payments account for more than 23 percent of the South Central Region total personal income for largely the same reasons as in Southeast, a smaller, older, and less affluent population. Transfer payments also account for more than 24 percent of total personal income in the Northeast Region largely because that region has a higher proportion of older population entitled to Social Security and Medicare even though that older population is declining.
The greatest percentage increase in transfer payments between 1991 and 2001 occurred in the South Central and Southwest Regions. Southwest had by far the greatest percentage increase in population during the 1990s and South Central was not far behind. In both regions the size of the retirement age population, and therefore entitlements, increased from 1991-2001.
It is important, in considering Extension program implications, to note that because of the demographic changes in each of the Extension Regions, total dollar value of transfer payments nearly doubled in the Southwest and South Central Regions. It is also noteworthy that transfer payments as a percent of total personal income increased in each of the eight Extension regions during the 1990s despite significant increases in total personal income throughout the state.
Department of Economic Development RegionsBecause there are a greater number of DED Regions (13) than either UM Extension Regions (8) or MODOT Districts (10), the regions are geographically and demographically smaller and therefore are more likely to reflect greater regional differences.
Because of large population and generally higher income, transfer payments are less of a component of total personal income in the St. Louis and Kansas City MSAs than other state regions. Table 4 shows that among the thirteen DED regions transfer payments make the lowest percent contribution to total personal income in St. Louis (11.5 percent) and Kansas City (12.5 percent) than any of the other regions. Nevertheless, because of the relatively large population, those two regions received a combined $12.65 billion in transfer payments in 2001 - 52 percent of the state total.
Transfer payments constitute an unusually high proportion of region total personal income in the South Central Region (30.8 percent) and the Bootheel Region (30.1 percent). In both those regions (as delineated by DED) there is a disproportionately large low-income population. That is a major factor in entitlement for Medicaid services - an entitlement that has been becoming a growing proportion of transfer payments.
After those two lower income regions, there are seven additional DED regions in which transfer payments account for more than 20 percent of total personal income. Those regions, in order of percent contribution of transfer payments to regional total personal income in 2001 are: North Central (24.5 percent); Northeast (23.7 percent); West Central (23.2 percent); Lower East Central - Cape (22.2 percent); Southwest (21.5 percent); Lake Ozark-Rolla (21.1 percent) and Northwest (20.3 percent). In the rural north Missouri regions the relatively large proportion of retirement age population is a major contributor to the relative size of transfer payments in the local economy. On the other hand people of retirement age have been moving into both the Lower East Central - Cape and Southwest regions. In both those regions the relative size of the low-income population is also somewhat above the state average.
The economic impact of transfer payments on local economies is important, especially with regard to maintaining health care services in several regions. The combination of Medicare and Medicaid transfer payments was approximately $10.3 billion in 2001 - all those payments going directly to the provider of the service on behalf of those guaranteed the entitlements. A further economic impact is evident from the increases in transfer payments in those regions attracting population growth. This was an especially evident factor in the Springfield-Branson Region in which transfer payments increased by 53.5 percent from 1991 to 2001 and by 97.2 percent during the same period in the Lake of the Ozarks-Rolla Region. Both those regions had significant in migration of population during the past decade.
Missouri Department of Transportation Districts
Table 5 shows significant variation in the amount of transfer payments and their contribution to total personal income among the 10 MODOT Districts. In 2001, transfer payments (entitlements) exceeded $1.3 billion in seven of the ten MODOT Districts.
Because the St. Louis and Kansas City Districts have, respectively, the largest populations among the districts they also received the largest amount of transfer payment income in 2001 - $8.07 billion in the St. Louis District and $4.53 in the Kansas City District. However, because median household income is also highest in those two regions, transfer payments accounted for only 11.8 and 12.8 percent respectively of district total personal income.
At the other extreme, there were four MODOT districts in 2001 in which transfer payments accounted for more than 22 percent of total personal income. The highest proportions were in the adjacent Willow Springs and Sikeston Districts in Southern Missouri. Those two districts have the highest proportion of low-income population among the ten districts - one of the factors that trigger entitlement to transfer payments. Transfer payments account for a higher proportion of total personal income in the Willow Springs District (25.2 percent) than any of the other nine districts. However, the Willow Springs District also had the third greatest percentage increase in transfer payments among the ten regions during the 1991-2001 decade (44.7 percent). A contributing factor is that the district had an appreciable gain in retirement age population during the 1990s - a characteristic of the population directly linked to the two largest components of transfer payments - Social Security and Medicare.
The Springfield and Jefferson City Districts had the first and second greatest increases in transfer payments, respectively, from 1991-2001. Their increases were 52.5 percent and 46.7 percent respectively. Both districts attracted additional retirement age population - a major factor. However, because of their generally larger income those two districts also rank relatively low in transfer payments as a proportion of total personal income - 16.3 percent in the Jeff City District and 18.3 percent in the Springfield District.
For planning purposes, an important factor about transfer payments is their major impact on retention of health care services. The combination of Medicare and Medicaid was responsible for more than $10.2 billion of transfer payments in Missouri in 2001. Those payments go directly to the providers of health care services. However, in the event the entitled population, e.g. retirees, declines in any of the districts, the revenue to support health care services will decline with it
Regional Planning Commission RegionsThere are 19 Regional Planning Commission Regions in Missouri ranging from as few as three counties (Lincoln, Montgomery, Warren) in the Boonslick Regional Planning Commission Region to as many as 11 counties in the Green Hills RPC generally located in North Central Missouri.
As indicated in Table 6, in 2001 transfer payments totaled $8.07 billion in the East-West Gateway Coordinating Council that generally covers the core of the St. Louis Metro Area. The second largest total was $4.09 billion in the Mid-America RPC that includes 5 of the counties in the Kansas City Metro Area. The third greatest amount of transfer payments was $2.19 billion received in the 10 counties comprising the Southwest Missouri Council of Governments. Springfield is at the center of that region. Following those three regions, there were 12 regions in which transfer payments ranged between $500 million and $1.0 billion. Total transfer payments were just over $1.0 billion in the Mid-Missouri RPC that includes Columbia and Jefferson City. There were two regions in which total transfer payments were significantly lower than the other 17: these were the Northeast Missouri RPC and the five county NWMO Regional Council of Governments which received 2001 transfer payments of $262 million and $197 million, respectively.
There were four of the RPC regions in which transfer payments accounted for more than 29 percent of total regional personal income in 2001. Those four were the six-county Bootheel RPC (29.2 percent), the seven county Kaysinger Basin RPC (29.8 percent), the seven county South Central Ozarks Council of Governments (30.8 percent) and the five county Ozark Foothills RPC (32.5 percent).
The greatest percentage increase in transfer payments from 1991-2001 occurred in the three county Boonslick RPC with a regional increase of 55.0 percent. Only two of the remaining 18 RPCs had a 1991-2001 increase of greater than 50.0 percent. In order, they were the Lake of the Ozarks Council of Governments with an increase of 52.5 percent and the Southwest Missouri Council of Governments with an increase of 51.5 percent.
At the other extreme, there were eight RPCs in which the regional total of transfer payments increased by less than 30 percent between 1991 and 2001. This was the case in all five of the RPCs in north Missouri (Green Hills, Mark Twain Council of Governments, Mo-Kan Regional Council, Northeast Missouri RPC, and NWMO RPC).
| Detailed Tables about Transfer Payments As a Proportion of Total Personal Income 1991 -2001 | ||
| The following links provide detailed tables of Transfer Payments As a Proportion of Total Personal Income 1991-2001. They are in both HTML and Adobe Acrobat (PDF) formats. | ||
| All Missouri Counties | ||
| Total Transfer Payments in Missouri, 1991-2001 - By County with State Totals | HTML | |
| Retirement Disabilities Insurance Benefit Payments and Medical Payments in Missouri, 1990-2000 - By County with State Totals | HTML | |
| Regional Tables | ||
| UO/E Regions | ||
| Total Transfer Payments in Missouri, 1991-2001 - By UM Extension Region | HTML | |
| Total Transfer Payments in Missouri, 1991-2001 - By County Within UM Extension Region | HTML | |
| Retirement Disabilities Insurance Benefit Payments and Medical Payments in Missouri, 1990-2000 - By UM Extension Region | HTML | |
| DED Regions | ||
| Total Transfer Payments in Missouri, 1991-2001 - By DED Region | HTML | |
| Total Transfer Payments in Missouri, 1991-2001 - By County Within DED Region | HTML | |
| Retirement Disabilities Insurance Benefit Payments and Medical Payments in Missouri, 1990-2000 - By DED Region | HTML | |
| MoDOT Regions | ||
| Total Transfer Payments in Missouri, 1991-2001 - By DOT District | HTML | |
| Total Transfer Payments in Missouri, 1991-2001 - By County Within DOT District | HTML | |
| Retirement Disabilities Insurance Benefit Payments and Medical Payments in Missouri, 1990-2000 - By DOT District | HTML | |
| RPC Regions | ||
| Total Transfer Payments in Missouri, 1991-2001 - By RPC | HTML | |
| Total Transfer Payments in Missouri, 1991-2001 - By County Within RPC | HTML | |
This file last modified Friday May 08, 2009, 14:33:03
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