Transfer payments (largely from government programs), and property income (dividends, interest, and rent), have become large sources of income and are particularly important to the elderly. According to the new Survey of Income and Program Participation (SIPP), these sources provided about a quarter of total income in the early 1980s. Nationally, households with an elderly head receive nearly half of the income from transfers and property, although such households form only 21 percent of total households. Obviously, the elderly's large transfer and property income can have an important impact on nonmetro areas that can attract migrating elderly. It also can be important in nonmetro areas where the elderly form a large share of the population because of outmigration of younger people.

Many elderly are poor, however, particularly in nonmetro areas. For some nonmetro areas, finding ways to provide services to the local elderly poor may be a more pressing issue than finding ways to attract elderly people with income to spend. Most elderly are in good health, both physically and financially. As they age, however, many become more frail, and some may outlive their assets. They, too, may eventually need help.

Nevertheless, attracting elderly migrants has contributed to rural economic growth in the recent past. The per capita income gap between metro and nonmetro counties declined only in nonmetro retirement counties that experienced substantial immigration of people at least 60 years old during the 1970s. The potential for attracting the elderly as a development strategy, however, is limited by the number of elderly of adequate means who are willing to move to rural retirement areas.

The elderly's property and transfer income can have beneficial effects on local economies. For example, income from these sources may make local economies more stable and less susceptible to variations in employment by local industries. Property and transfer income also has multiplier effects in nonmetro counties. By spending their income, the elderly create local jobs.

Not all the effects may be beneficial, however, The jobs created by the elderly's spending may be relatively low-paying. Much spending by elderly households is for items purchased from retail stores and service firms, which often do not pay their workers particularly well.

Regardless of the wages paid by the jobs created, some counties with a small population and business base may not be able to benefit much from potential multiplier effects. If sufficient local businesses do not exist, elderly cannot shop locally very much.