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The Wrong Side(s) of the Tracks Estimating the Causal Effects of Racial Segregation on City Outcomes

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  • Elizabeth Oltmans Ananat
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    Abstract

    At the metropolitan level there is a striking negative correlation between residential racial segregation and population characteristics -- particularly for black residents -- but it is widely recognized that this correlation may not be causal. This paper provides a novel test of the causal relationship between segregation and population outcomes by exploiting the arrangements of railroad tracks in the 19th century to isolate plausibly exogenous variation in cities' susceptibility to segregation. I show that, conditional on miles of railroad track laid, the extent to which track configurations physically subdivided cities strongly predicts the level of segregation that ensued after the Great Migration of African-Americans to northern and western cities in the 20th century. At the start of the Great Migration, though, track configurations were uncorrelated with racial concentration, ethnic dispersion, income, industry, education, and population, indicating that reverse causality is unlikely. Instrumental variables estimates demonstrate that segregation leads to lower incomes and lower education among blacks. For whites, there is a mix of positive and negative effects: segregation decreases the probability of being a college graduate or a high earner, but also decreases the probability of being poor or unemployed. Segregation could generate these effects either by affecting human capital acquisition of residents of different races and socio-economic groups ('production') or by inducing sorting by race and SES into different cities ('selection'). This paper provides evidence that is most consistent with a combination of both production and selection.

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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13343.

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    Date of creation: Aug 2007
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    Publication status: published as American economic journal : a journal of the American Economic Association. - Nashville, Tenn. : Assoc., ISSN 1945-7782, ZDB-ID 24423841. - Vol. 3.2011, 2, p. 34-66
    Handle: RePEc:nbr:nberwo:13343

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    12. William J. Collins, 2001. "Race, Roosevelt, and Wartime Production: Fair Employment in World War II Labor Markets," American Economic Review, American Economic Association, American Economic Association, vol. 91(1), pages 272-286, March.
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    Cited by:
    1. Ananat, Elizabeth Oltmans & Washington, Ebonya, 2009. "Segregation and Black political efficacy," Journal of Public Economics, Elsevier, Elsevier, vol. 93(5-6), pages 807-822, June.
    2. Weinhardt, Felix, 2013. "Neighborhood Quality and Student Performance," IZA Discussion Papers 7139, Institute for the Study of Labor (IZA).
    3. Robert A. Margo & Leah Platt Boustan, 2011. "White Suburbanization And African-American Home Ownership, 1940-1980," Boston University - Department of Economics - Working Papers Series, Boston University - Department of Economics WP2011-024, Boston University - Department of Economics.
    4. Robert Bifulco & Delia Furtado & Stephen L. Ross, 2009. "Why Are Ghettos Bad? Examining the Role of the Metropolitan Educational Environment," Working papers, University of Connecticut, Department of Economics 2009-30, University of Connecticut, Department of Economics.
    5. Leah Platt Boustan, 2013. "Racial Residential Segregation in American Cities," NBER Working Papers 19045, National Bureau of Economic Research, Inc.
    6. Simon Burgess & Deborah Wilson & Adam Briggs & Anete Piebalga, 2008. "Segregation and the Attainment of Minority Ethnic Pupils in England," The Centre for Market and Public Organisation 08/204, Department of Economics, University of Bristol, UK.
    7. Ananat, Elizabeth Oltmans & Washington, Ebonya, 2008. "Segregation and Black Political Efficacy," Working Papers, Yale University, Department of Economics 30, Yale University, Department of Economics.
    8. Leah Platt Boustan & Robert A. Margo, 2007. "Race, Segregation, and Postal Employment: New Evidence on Spatial Mismatch," NBER Working Papers 13462, National Bureau of Economic Research, Inc.
    9. Stephen L. Ross, 2009. "Social Interactions within Cities: Neighborhood Environments and Peer Relationships," Working papers, University of Connecticut, Department of Economics 2009-31, University of Connecticut, Department of Economics.

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