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The Wrong Side(s) of the Tracks: The Causal Effects of Racial Segregation on Urban Poverty and Inequality

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  • Elizabeth Oltmans Ananat
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    Abstract

    A striking negative correlation exists between an area's residential racial segregation and its population characteristics, but it is recognized that this relationship may not be causal. I present a novel test of causality from segregation to population characteristics by exploiting the arrangements of railroad tracks in the nineteenth century to isolate plausibly exogenous variation in areas' susceptibility to segregation. I show that this variation satisfies the requirements for a valid instrument. Instrumental variables estimates demonstrate that segregation increases metropolitan rates of black poverty and overall black-white income disparities, while decreasing rates of white poverty and inequality within the white population. (JEL I32, J15, N31, N32, N91, N92, R23)

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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/app.3.2.34
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    File URL: http://www.aeaweb.org/aej/app/data/2009-0157_data.zip
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    Bibliographic Info

    Article provided by American Economic Association in its journal American Economic Journal: Applied Economics.

    Volume (Year): 3 (2011)
    Issue (Month): 2 (April)
    Pages: 34-66

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    Handle: RePEc:aea:aejapp:v:3:y:2011:i:2:p:34-66

    Note: DOI: 10.1257/app.3.2.34
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    Web page: http://www.aeaweb.org/aej-applied
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    References

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. Leah Platt Boustan, 2007. "Was Postwar Suburbanization "White Flight"? Evidence from the Black Migration," NBER Working Papers 13543, National Bureau of Economic Research, Inc.
    2. David Cutler & Edward Glaeser & Jacob Vigdor, 2004. "Is the Melting Pot Still Hot? Explaining the Resurgence of Immigrant Segregation," Working Papers 04-10, Center for Economic Studies, U.S. Census Bureau.
    3. William J. Collins, 2001. "Race, Roosevelt, and Wartime Production: Fair Employment in World War II Labor Markets," American Economic Review, American Economic Association, vol. 91(1), pages 272-286, March.
    4. David Card & Alan Krueger, 1996. "School Resources and Student Outcomes: An Overview of the Literature and New Evidence from North and South Carolina," NBER Working Papers 5708, National Bureau of Economic Research, Inc.
    5. Joshua D. Angrist & Guido W. Imbens, 1995. "Identification and Estimation of Local Average Treatment Effects," NBER Technical Working Papers 0118, National Bureau of Economic Research, Inc.
    6. Collins, William J. & Margo, Robert A., 2000. "Residential segregation and socioeconomic outcomes: When did ghettos go bad?," Economics Letters, Elsevier, vol. 69(2), pages 239-243, November.
    7. Vigdor, Jacob L., 2002. "The Pursuit of Opportunity: Explaining Selective Black Migration," Journal of Urban Economics, Elsevier, vol. 51(3), pages 391-417, May.
    8. Nathaniel Baum-Snow, 2007. "Did Highways Cause Suburbanization?," The Quarterly Journal of Economics, MIT Press, vol. 122(2), pages 775-805, 05.
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    Cited by:
    1. Angelo, Mele, 2009. "Poisson Indices of Segregation," MPRA Paper 15155, University Library of Munich, Germany.
    2. repec:wyi:wpaper:002057 is not listed on IDEAS
    3. Elizabeth Ananat & Shihe Fu & Stephen L. Ross, 2013. "Race-Specific Agglomeration Economies: Social Distance and the Black-White Wage Gap," NBER Working Papers 18933, National Bureau of Economic Research, Inc.
    4. Boustan, Leah P. & Margo, Robert A., 2013. "A silver lining to white flight? White suburbanization and African–American homeownership, 1940–1980," Journal of Urban Economics, Elsevier, vol. 78(C), pages 71-80.

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