OSEDA - Office of Social and Economic Analysis

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" to receive payments. The largest and best-known transfer payments are Social Security, 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 $18.87 billion in 1992. By 2002 transfer payments received by Missourians had increased to $26.34 billion. That is an increase of 39.5 percent, well above the 25.1 percent increase in Missouri total personal income from 1992 to 2002. As a result of that large increase, transfer payments, which accounted for 14.6 percent of Missourians' total personal income in 1992, grew to account for 16.3 percent of Missouri total personal income in 2002.

Of the $26.34 billion in transfer payments received by Missourians in 2002, about $10.27 billion (39.0%) was allocated to those entitled to Social Security retirement and disability payments. Also included in that total is $290 million paid to those Missourians entitled to Railroad Retirement. Another major component of transfer payments in 2002 was to those Missourians entitled to medical coverage. Medical transfer payments totaled $10.96 billion (41.6% of the total) in 2002. Of those payments, Medicare accounted for $5.38 billion and Medicaid payments accounted for $5.51 billion. These data show that more than 80 percent of 2002 transfer payments to Missourians were either retirement or medical.

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 1992 totaled $6.44 billion; by 2002 government medical payments made to Missourians had increased to $10.96 billion - a 70 percent increase in constant dollars. That is an increase more than twice the increase in total personal income in Missouri from 1992-2002.

Of the $26.34 billion in Missouri transfer payments in 2002, Social Security and railroad retirement accounted for 38.6 percent of the total and medical payments accounted for 41.6 percent. Those entitlements combine to account for just over 80 percent of the total (Chart 1 1). Other categories of transfer payments and their amount in 2002 were: (1) income maintenance: includes SSI, Temporary Assistance to Needy Families (TANF), food stamps, etc. Payments of $2.2 billion were made in this category in 2002 (8.2 percent of total); (2) unemployment insurance benefits: payments totaled $734 million in 2001 (2.8 percent of total). Unemployment payments were comparatively very low in 1999-2000 but began to increase by 2001 and increased further in 2002. (3) Veterans benefit payments: includes pensions, insurance, disability, etc. Payments totaled $583 million in 2002 (2.2 percent of total); (4) Federal Education and training assistance payments: total $273 million in 2002 (1.0 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.

As displayed on Map 1, transfer payment income increased in all Missouri counties from 1992 to 2002.

As described above, transfer payment income in Missouri increased by 39.5 percent from 1992 to 2002 and increases in most counties were correspondingly large. There were 32 counties in which transfer payment income increased by more than 50 percent (in constant dollars) from 1992 to 2002.

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 and early 2000s in the size of the "entitled" income in each of the counties. As discussed in the Regional Profile section on changes in the income by age, the income between age 65 and 85 declined in most rural north Missouri counties during the 1990s. As the size of the "entitled" income declined so did the amount of transfer payment income (especially Social Security and Medicare) in those counties during that decade.

Map 1 shows that 13 of the 16 counties in which transfer payment income increased by less than 25 percent between 1992 and 2002 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 14 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 income.

As described above, transfer payments have become an important part of Missouri income - 16.3 percent of total personal income in 2002. However, in many smaller income 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 87 Missouri counties in which transfer payments accounted for more than 20 percent of county total personal income in 2002. Of those 84 counties, there were 19 in which transfer payments accounted for more than 30 percent of county total personal income. Wayne County in the southeast Ozarks leads the state with 41.0 percent of its total personal income derived from transfer payments. Adjoining Reynolds and Ripley Counties, in which transfer payments accounted for 39.9 and 39.0 percent of county total personal income, respectively, closely follow Wayne.

The table and map also show that transfer payments contribute the smallest percentage to total county personal income in the larger and more affluent counties. Typical of those counties in 2002 are Platte (8.7 percent of income from transfer payments), St. Charles (9.9 percent), St. Louis County (10.5 percent), Clay (11.3 percent) and Boone (12.9 percent). However, transfer payment income has been increasing in each of those counties. The dollar amount of transfer payment income more than doubled between 1992 and 2002 in Christian County and increased by more than 70 percent between 1992 and 2002 in Platte, Cass, Lincoln, St. Charles, Stone, Taney and Webster Counties.

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 income 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 income among the regions, it also had the largest income derived from transfer payments in 200 ($9.52 billion). But, because the East Central Region also has the largest income and the greatest total personal income among the regions, transfer payments in East Central account for only 13.3 percent of East Central total personal income in 2002. That is the smallest percentage among the eight regions.

The situation is similar in the West Central Region. West Central has the second largest income and second highest total personal income among the regions. Correspondingly, total transfer payments received by the West Central public was $5.22 billion in 2002, 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 14.8 percent of region total personal income in 2002.

At the other extreme, from the St. Louis and Kansas City dominated regions, there were three extension regions in which transfer payments accounted for 26.9 percent of regional total personal income in 2002. Highest among those regions was the Southeast Region that not only has a relatively small income, but also has a higher percentage of low-income households than any of the other regions. Transfer payments account for 23.8 percent of the South Central Region total personal income for largely the same reasons as in Southeast, a smaller, older, and less affluent income. 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 income entitled to Social Security and Medicare even though that older income is declining.

The greatest percentage increase in transfer payments between 1992 and 2002 occurred in the South Central (50.8 percent) and Southwest Regions (55.5 percent). Southwest had by far the greatest percentage increase in income during the 1990s and South Central was not far behind. In both regions the size of the retirement age income, and therefore entitlements, also increased significantly from 1992-2002.

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.

Because 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 income 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 the St. Louis MSA (12.8 percent) and Kansas City (14.2 percent) than any of the other regions. Nevertheless, because of the relatively large income, those two regions received a combined $12.65 billion in transfer payments in 2002 - 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 (30.7 percent). In both those regions (as delineated by DED) there is a disproportionately large low-income income. That is a major factor in entitlement for Medicaid services - an entitlement that has been becoming a growing proportion of transfer payments especially in lower income regions.

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 2002 are: North Central (24.7 percent); Northeast (23.9 percent); West Central (23.7 percent); Lower East Central - Cape (23.1 percent); Southwest (22.5 percent); Lake Ozark-Rolla (21.5 percent) and Northwest (20.7 percent). In the rural north Missouri regions the relatively large proportion of retirement age income 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 income 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. The combination of Medicare and Medicaid transfer payments was approximately $11 billion in 2002 - 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 income growth. This was an especially evident factor in the Springfield-Branson Region in which transfer payments increased by 60.9 percent from 1992 to 2002 and by 55.2 percent during the same period in the Lake of the Ozarks-Rolla Region. Both those regions had significant in migration of transfer payment entitled income during the past decade.

Table 5 shows significant variation in the amount of transfer payments and their contribution to total personal income among the 10 MODOT Districts. In 2002, transfer payments (entitlements) exceeded $1.4 billion in seven of the ten MODOT Districts.

Because the St. Louis and Kansas City Districts have, respectively, the largest incomes among the districts they also received the largest amount of transfer payment income in 2002 - $8.65 billion in the St. Louis District and $4.95 in the Kansas City District. However, because median household income is also highest in those two regions, transfer payments accounted for only 12.8 and 14.4 percent respectively of district total personal income.

At the other extreme, there were four MODOT districts in 2002 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. Transfer payments account for 25.8 percent of 2002 total personal income in each of those regions. Those two districts have the highest proportion of low-income income among the ten districts - one of the factors that trigger entitlement to transfer payments. Transfer payments accounted for 25.1 percent of total personal income in the North Central/Macon District mostly because of a disproportionately large older income.

The Springfield, Jefferson City and Willow Springs Districts had the three greatest percentage increases in transfer payments from 1992-2002. Their increases were 59.0 percent, 52.2 percent and 52.0 percent respectively. All three districts attracted additional retirement age income during the past decade- a major factor. However, because of their generally larger income in the Springfield and Jefferson City Districts they also rank relatively low in transfer payments as a proportion of total personal income - 17.2 percent in the Jeff City District and 19.2 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 nearly $11 billion of transfer payments in Missouri in 2002. Those payments go directly to the providers of health care services. However, in the event the entitled income, e.g. retirees, declines in any of the districts, the revenue to support health care services will decline with it.

There 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 located in North Central Missouri.

As indicated in Table 6 2002 transfer payments totaled $8.65 billion in the East-West Gateway Coordinating Council Region that generally covers the core of the St. Louis Metro Area. The second largest total was $4.47 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 $2.41 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 $1.1 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 2002 transfer payments of $268 million and $201 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 2002. Those four were the six-county Bootheel RPC (29.8 percent), the seven county Kaysinger Basin RPC (29.0 percent), the seven county South Central Ozarks Council of Governments (30.8 percent) and the five county Ozark Foothills RPC (33.1 percent).

The greatest percentage increase in transfer payments from 1992-2002 occurred in the three county Boonslick RPC with a regional increase of 60.7 percent. There were four of the remaining 18 RPCs that had a 1992-2002 increase of greater than 50.0 percent. In order, they were the Southwest Missouri Council of Governments with an increase of 58.5 percent, the Lake of the Ozarks Council of Governments with an increase of 56.6 percent, the Mid-Missouri RPC with an increase of 52.1 percent and the Meramec RPC with an increase of 50.4 percent. At the other extreme, there were four RPCs in which the regional total of transfer payments increased by less than 30 percent between 1992 and 2002. All four of those RPCs are in north Missouri (Green Hills, Mo-Kan Regional Council, Northeast Missouri RPC, and NWMO RPC).

Detailed Tables of Total Transfer Payments in Missouri
The following links provide detailed tables of Total Tranfer Payments in Missouri, 1992-2002. They are available in both HTML and Adobe Acrobat(PDF) formats. Missouri Summary
Total Transfer Payments by Category, Missouri: 2002	GIF
All Missouri Counties
Total Transfer Payments in Missouri, 1992-2002 - By County with State Totals	HTML	PDF
Regional Tables
UO/E Regions
Total Transfer Payments in Missouri, 1992-2002 - By UM Extension Region	HTML	PDF
Total Transfer Payments in Missouri, 1992-2002 - By County Within UM Extension Region	HTML	PDF
DED Regions
Total Transfer Payments in Missouri, 1992-2002 - By DED Region	HTML	PDF
Total Transfer Payments in Missouri, 1992-2002 - By County Within DED Region	HTML	PDF
MoDOT Regions
Total Transfer Payments in Missouri, 1992-2002 - By DOT District	HTML	PDF
Total Transfer Payments in Missouri, 1992-2002 - By County Within DOT District	HTML	PDF
RPC Regions
Total Transfer Payments in Missouri, 1992-2002 - By RPC	HTML	PDF
Total Transfer Payments in Missouri, 1992-2002 - By County Within RPC	HTML	PDF


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