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Separate When Equal? Racial Inequality and Residential Segregation

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Author Info
Bayer, Patrick (Yale U)
Fang, Hanming
McMillan, Robert (U of Toronto)

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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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I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

References listed on IDEAS
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.:

  1. Shelly Lundberg & Richard Startz, 1998. "Race, Information, and Segregation," Discussion Papers in Economics at the University of Washington 0047, Department of Economics at the University of Washington.
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  2. Coate, Stephen & Loury, Glenn C, 1993. "Will Affirmative-Action Policies Eliminate Negative Stereotypes?," American Economic Review, American Economic Association, vol. 83(5), pages 1220-40, December. [Downloadable!] (restricted)
    Other versions:
  3. King, A Thomas & Mieszkowski, Peter, 1973. "Racial Discrimination, Segregation, and the Price of Housing," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 590-606, May-June. [Downloadable!] (restricted)
  4. Vigdor, Jacob L., 2003. "Residential segregation and preference misalignment," Journal of Urban Economics, Elsevier, vol. 54(3), pages 587-609, November. [Downloadable!] (restricted)
  5. Patrick Bayer & Robert McMillan & Kim Rueben, 2004. "Residential Segregation in General Equilibrium," Working Papers 885, Economic Growth Center, Yale University. [Downloadable!]
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  6. Benabou, R., 1991. "Location, Education, and Production," Working papers 582, Massachusetts Institute of Technology (MIT), Department of Economics.
  7. 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. [Downloadable!]
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  8. David M. Cutler & Edward L. Glaeser & Jacob L. Vigdor, 1999. "The Rise and Decline of the American Ghetto," Journal of Political Economy, University of Chicago Press, vol. 107(3), pages 455-506, June. [Downloadable!] (restricted)
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  9. George C. Galster, 1982. "Black and White Preferences for Neighborhood Racial Composition," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 10(1), pages 39-66. [Downloadable!] (restricted)
  10. 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. [Downloadable!] (restricted)
  11. Schelling, Thomas C, 1969. "Models of Segregation," American Economic Review, American Economic Association, vol. 59(2), pages 488-93, May. [Downloadable!] (restricted)
  12. Ross, Stephen L., 1998. "Racial Differences in Residential and Job Mobility: Evidence Concerning the Spatial Mismatch Hypothesis," Journal of Urban Economics, Elsevier, vol. 43(1), pages 112-135, January. [Downloadable!] (restricted)
  13. Rajiv Sethi & Rohini Somanathan, 2001. "Inequality and Segregation," Microeconomics 0108005, EconWPA. [Downloadable!]
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  14. Kenneth Arrow, 1971. "The Theory of Discrimination," Working Papers 403, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
  15. Cutler, David M & Glaeser, Edward L, 1997. "Are Ghettos Good or Bad?," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 827-72, August.
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  16. Harsman Bjorn & Quigley John M., 1995. "The Spatial Segregation of Ethnic and Demographic Groups: Comparative Evidence from Stockholm and San Francisco," Journal of Urban Economics, Elsevier, vol. 37(1), pages 1-16, January. [Downloadable!] (restricted)
  17. Rajiv Sethi & Rohini Somanathan, 2001. "Racial Income Disparities and the Measurement of Segregation," Urban/Regional 0107001, EconWPA. [Downloadable!]
  18. Steven Berry & Joel Waldfogel, 2003. "Product Quality and Market Size," NBER Working Papers 9675, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  19. Weinberg, Bruce A., 2000. "Black Residential Centralization and the Spatial Mismatch Hypothesis," Journal of Urban Economics, Elsevier, vol. 48(1), pages 110-134, July. [Downloadable!] (restricted)
  20. Durlauf, Steven N, 1996. " A Theory of Persistent Income Inequality," Journal of Economic Growth, Springer, vol. 1(1), pages 75-93, March.
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Cited by:
(explanations, 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.)

  1. 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. [Downloadable!]
  2. 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. [Downloadable!] (restricted)
  3. David Card & Alexandre Mas & Jesse Rothstein, 2007. "Tipping and the Dynamics of Segregation," NBER Working Papers 13052, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Patrick Bayer & Robert McMillan, 2005. "Racial Sorting and Neighborhood Quality," NBER Working Papers 11813, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. 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. [Downloadable!]
  6. Carlos Medina & Leonardo Morales & Jairo Nuñez, 2008. "Quality of Life in Urban Neighborhoods in Colombia:The Cases of Bogotá and Medellín," BORRADORES DE ECONOMIA 005126, BANCO DE LA REPÚBLICA. [Downloadable!]
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