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Inequality and the Measurement of Residential Segregation by Income In American Neighborhoods

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  • Tara Watson

Abstract

American metropolitan areas have experienced rising residential segregation by income since 1970. One potential explanation for this change is growing income inequality. However, measures of residential sorting are typically mechanically related to the income distribution, making it difficult to identify the impact of inequality on residential choice. This paper presents a measure of residential segregation by income, the Centile Gap Index (CGI) which is based on income percentiles. Using the CGI, I find that a one standard deviation increase in income inequality raises residential segregation by income by 0.4-0.9 standard deviations. Inequality at the top of the distribution is associated with more segregation of the rich, while inequality at the bottom and declines in labor demand for less-skilled men are associated with residential isolation of the poor. Inequality can fully explain the rise in income segregation between 1970 and 2000.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14908.

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Date of creation: Apr 2009
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Publication status: published as Tara Watson, 2009. "Inequality And The Measurement Of Residential Segregation By Income In American Neighborhoods," Review of Income and Wealth, Blackwell Publishing, vol. 55(3), pages 820-844, 09.
Handle: RePEc:nbr:nberwo:14908

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  1. Rappaport, Jordan & Kahn, Matthew E. & Glaeser, Edward, 2008. "Why Do The Poor Live In Cities? The Role of Public Transportation," Scholarly Articles 2958224, Harvard University Department of Economics.
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  7. Davidoff, Thomas, 2005. "Income sorting: Measurement and decomposition," Journal of Urban Economics, Elsevier, vol. 58(2), pages 289-303, September.
  8. Edward L. Glaeser, 2007. "The Economics Approach to Cities," NBER Working Papers 13696, National Bureau of Economic Research, Inc.
  9. Anne C. Case & Lawrence F. Katz, 1991. "The Company You Keep: The Effects of Family and Neighborhood on Disadvantaged Youths," NBER Working Papers 3705, National Bureau of Economic Research, Inc.
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  11. P. A. Jargowsky, . "Take the money and run: Economic segregation in U.S. metropolitan areas," Institute for Research on Poverty Discussion Papers 1056-95, University of Wisconsin Institute for Research on Poverty.
  12. Caroline Hoxby, 2000. "Peer Effects in the Classroom: Learning from Gender and Race Variation," NBER Working Papers 7867, National Bureau of Economic Research, Inc.
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Cited by:
  1. David Jaume & Leonardo Gasparini, 2013. ""Un Estudio sobre el Incremento de la Segregación Escolar en Argentina"," CEDLAS, Working Papers 0143, CEDLAS, Universidad Nacional de La Plata.
  2. Uslaner, Eric, 2011. "Contact, Diversity, and Segregation," SULCIS Working Papers 2011:5, Stockholm University Linnaeus Center for Integration Studies - SULCIS.
  3. Ludwig, Jens & Duncan, Greg J. & Katz, Lawrence F. & Kessler, Ronald & Kling, Jeffrey R. & Gennetian, Lisa A. & Sanbonmatsu, Lisa, 2012. "Neighborhood Effects on the Long-Term Well-Being of Low-Income Adults," Scholarly Articles 11870359, Harvard University Department of Economics.
  4. Jens Ludwig & Greg J. Duncan & Lisa A. Gennetian & Lawrence F. Katz & Ronald C. Kessler & Jeffrey R. Kling & Lisa Sanbonmatsu, 2013. "Long-Term Neighborhood Effects on Low-Income Families: Evidence from Moving to Opportunity," NBER Working Papers 18772, National Bureau of Economic Research, Inc.
  5. Julia Burdick-Will & Jens Ludwig, 2010. "Neighborhood and Community Initiatives," NBER Chapters, in: Targeting Investments in Children: Fighting Poverty When Resources are Limited, pages 303-321 National Bureau of Economic Research, Inc.
  6. Leonardo Gasparini & David Jaume & Monserrat Serio & Emmanuel Vazquez, 2011. "La segregación escolar en Argentina. Reconstruyendo la Evidencia," CEDLAS, Working Papers 0123, CEDLAS, Universidad Nacional de La Plata.
  7. Pascaline Vincent & Frédéric Chantreuil & Benoït Tarroux, 2012. "Appraising the breakdown of unequal individuals in large French cities," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201220, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
  8. Sara B. Heller & Brian A. Jacob & Jens Ludwig, 2010. "Family Income, Neighborhood Poverty, and Crime," NBER Chapters, in: Controlling Crime: Strategies and Tradeoffs, pages 419-459 National Bureau of Economic Research, Inc.
  9. Melissa S. Kearney & Phillip B. Levine, 2014. "Income Inequality, Social Mobility, and the Decision to Drop Out of High School," NBER Working Papers 20195, National Bureau of Economic Research, Inc.
  10. England, Richard W. & Zhao, Min Qiang & Huang, Ju-Chin, 2013. "Impacts of property taxation on residential real estate development," Journal of Housing Economics, Elsevier, vol. 22(1), pages 45-53.

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