Prior literature has compared the economies of urban and rural areas. According to data from the U.S. Census Bureau, household incomes in non-metropolitan areas, on average, are lower than household incomes in metropolitan areas (DeNavas-Walt, Proctor, & Lee, 2006). Additionally, wages are generally lower and poverty rates are higher in rural areas (DeNavas et al., 2006; USDA, 2004; USDA, 2007). However, unemployment has historically been somewhat similar in urban and rural areas (USDA, 2006; Strong, Grosso, Burwick, Jethwani, & Ponza, 2005). Another economic issue to consider when comparing urban and rural child care costs is the potential for differences in the cost of living in those areas. Although rural areas are generally thought of as being lower-cost places to live compared to urban areas, there is an active debate among economists as to whether this is actually the case and if so, how it should be considered in measures of economic affluence (Weber, Jensen, Miller, Mosley, & Fisher, 2005).
In addition to general economic conditions, urban and rural differences in the labor force participation of parents with young children are important to note. Early results from the 2005 NHES show that children are more likely to participate in non-parental care when their mothers are employed or are enrolled in school, and when they live in one-parent families (Iruka & Carver, 2006). Data from the 2005 American Community Survey (ACS) provide information comparing labor force participation of the parents of urban and rural children under age 6, which is helpful in thinking about child care needs. These data show that urban and rural children generally lived in families that participated in the labor force. For example, in both urban and rural areas about 6 out of 10 children lived in families where at least one parent living in the household participated in the labor force the previous year. For children in single-parent families, only about 1 out of 4 children lived in families where the adult parent did not participate in the labor force at all the prior year. However, when examining families with two parents, a higher percentage of rural children had both of their parents in the labor force the previous year than urban children (56 percent compared to 52 percent).
 Author’s tabulations from the American Community Survey, Table B23008, accessed through the American Fact Finder at http://factfinder.census.gov/home/saff/main.html?_lang=en. The figures in this paragraph exclude children that did not live with either parent.
 Includes both one and two-parent families.
 Rural children were also more likely to be in two-parent families than urban children (76 percent compared to 67 percent).