The study explores, on a State-by-State basis, the issue of income inequality between the metro and nonmetro populations and among nonmetro counties. Four specific measures are developed for each State: 1) the difference between 1987 average metro and nonmetro per capita income, 2) the change in this difference between 1979 and 1987, 3) the level of inequality in average county income among nonmetro counties (as measured by the Gini coefficient) and 4) the change in that measure over the 1979-87 period. State rankings on each measure are also presented. In addition, State metro and nonmetro economic performance, as measured by per capita income growth, is compared with performance as measured by earnings growth, population growth, and net migration. The analysis argues that a Federal rural development policy merits strong consideration as a step toward reversing the rapid divergence among State per capita incomes which occurred during the 1980's.