Rajiv Sethi (Department of Economics,Barnard College,Columbia University and the Institute for Advanced Study) Rohini Somanathan (Department of Economics, Delhi School of Economics, Delhi, India)
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How much of the observed segregation between black and white Americans can be attributed to income disparities between the two groups? We adopt an approach to the decomposition of segregation measures that combines the method of indirect standardization with the idea that some degree of segregation is the outcome of purely random processes. Using the dissimilarity index as a measure of segregation and data on race and income from US metropolitan areas for 2000, we nd that the role played by racial income inequality in accounting for segregation is modest but varies signi cantly across cities. Our work suggests that for cities that are relatively small or for those where the share of black households in the total population is small, it may be useful to adjust existing measures of dissimilarity to better capture the role of non-income factors in determining segregation.
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Paper provided by Centre for Development Economics, Delhi School of Economics in its series Working papers with number
177.
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