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Separate When Equal? Racial Inequality and Residential Segregation

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  • Bayer, Patrick

    (Yale U)

  • Fang, Hanming
  • McMillan, Robert

    (U of Toronto)

Abstract

Standard intuition suggests that residential segregation in the United States will decline when racial inequality narrows. In this paper, we hypothesize that the opposite will occur. We note that middle-class black neighborhoods are in short supply in many U.S. metropolitan areas, forcing highly educated blacks either to live in predominantly white high-socioeconomic status (SES) neighborhoods or in more black lower-SES neighborhoods. Increases in the proportion of highly educated blacks in a metropolitan area may then lead to the emergence of new middle-class black neighborhoods, causing increases in residential segregation. We formalize this mechanism using a simple model of residential choice that permits endogenous neighborhood formation. Our primary empirical analysis, based on across-MSA evidence from the 2000 Census, indicates that this mechanism does indeed operate: as the proportion of highly educated blacks in an MSA increases, so the segregation of blacks at all education levels increases. Time-series evidence provides additional support for the hypothesis, showing that an increase in black educational attainment in a metropolitan area between 1990-2000 significantly increases segregation. Our analysis has important implications for the evolution of both residential segregation and racial socioeconomic inequality, drawing attention to a negative feedback loop likely to inhibit reductions in segregation and racial inequality over time.

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Paper provided by Yale University, Department of Economics in its series Working Papers with number 9.

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Date of creation: Oct 2005
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Handle: RePEc:ecl:yaleco:9

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  1. David M. Cutler & Edward L. Glaeser & Jacob L. Vigdor, 1997. "The Rise and Decline of the American Ghetto," NBER Working Papers 5881, National Bureau of Economic Research, Inc.
  2. Patrick J. Bayer & Robert McMillan & Kim Rueben, 2004. "What Drives Racial Segregation? New Evidence Using Census Microdata," Yale School of Management Working Papers ysm409, Yale School of Management.
  3. Ihlanfeldt, Keith R. & Scafidi, Benjamin, 2002. "Black Self-Segregation as a Cause of Housing Segregation: Evidence from the Multi-City Study of Urban Inequality," Journal of Urban Economics, Elsevier, vol. 51(2), pages 366-390, March.
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  8. Berry, Steven & Waldfogel, Joel, 2005. "Product Quality and Market Size," Working Papers 1, Yale University, Department of Economics.
  9. Vigdor, Jacob L., 2003. "Residential segregation and preference misalignment," Journal of Urban Economics, Elsevier, vol. 54(3), pages 587-609, November.
  10. Patrick Bayer & Robert McMillan & Kim Rueben, 2004. "Residential Segregation in General Equilibrium," Working Papers 885, Economic Growth Center, Yale University.
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Citations

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Cited by:
  1. Carlos Medina & Leonardo Morales & Jairo Nuñez, . "Quality of Life in Urban Neighborhoods in Colombia: The Cases of Bogotá and Medellín," Borradores de Economia 536, Banco de la Republica de Colombia.
  2. H. Spencer Banzhaf & Randall P. Walsh, 2010. "Segregation and Tiebout Sorting: Investigating the Link between Investments in Public Goods and Neighborhood Tipping," NBER Working Papers 16057, National Bureau of Economic Research, Inc.
  3. David Card & Alexandre Mas & Jesse Rothstein, 2008. "Tipping and the Dynamics of Segregation," The Quarterly Journal of Economics, MIT Press, vol. 123(1), pages 177-218, 02.
  4. Veronica Guerrieri & Daniel Hartley & Erik Hurst, 2010. "Endogenous gentrification and housing price dynamics," Working Paper 1008, Federal Reserve Bank of Cleveland.
  5. Patrick Bayer & Robert McMillan, 2005. "Racial Sorting and Neighborhood Quality," NBER Working Papers 11813, National Bureau of Economic Research, Inc.
  6. Åslund, Olof & Nordström Skans, Oskar, 2005. "Will I see you at work? Ethnic workplace segregation in Sweden 1985–2002," Working Paper Series 2005:24, IFAU - Institute for Labour Market Policy Evaluation.
  7. Elizabeth Oltmans Ananat, 2007. "The Wrong Side(s) of the Tracks Estimating the Causal Effects of Racial Segregation on City Outcomes," NBER Working Papers 13343, National Bureau of Economic Research, Inc.
  8. Judith K. Hellerstein & Melissa McInerney & David Neumark, 2008. "Neighbors And Co-Workers: The Importance Of Residential Labor Market Networks," NBER Working Papers 14201, National Bureau of Economic Research, Inc.
  9. Osiris Jorge, Parcero & Adolfo, Cristobal-Campoamor, 2009. "Dynamics of neighborhood formation and segregation by income," MPRA Paper 16936, University Library of Munich, Germany.
  10. Anil Nathan, 2009. "Sorting and Statistical Discrimination in Schools: An Analysis Using the National Longitudinal Study of Adolescent Health," Working Papers 0905, College of the Holy Cross, Department of Economics.

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