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Separate when equal? Racial inequality and residential segregation

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  • Bayer, Patrick
  • Fang, Hanming
  • McMillan, Robert

Abstract

This paper sets out a new mechanism involving the emergence of middle-class black neighborhoods that can lead segregation in American cities to increase as racial inequality narrows. The formation of such neighborhoods requires a critical mass of highly educated blacks in the population, and leads to an increase in segregation when those communities are attractive for blacks who would otherwise reside in middle-class white neighborhoods. To assess the empirical importance of this “neighborhood formation” mechanism, we propose a two-part research design. First, inequality and segregation should be negatively related in cross section for older blacks if our mechanism operates strongly, as we find using both the 1990 and 2000 Censuses. Second, a negative relationship should also be apparent over time, particularly for older blacks. Here, we show that increased educational attainment of blacks relative to whites in a city between 1990 and 2000 leads to a significant rise in segregation, especially for older blacks, and to a marked increase in the number of middle-class black communities. These findings draw attention to a negative feedback loop between racial inequality and segregation that has implications for the dynamics of both phenomena.

Suggested Citation

  • Bayer, Patrick & Fang, Hanming & McMillan, Robert, 2014. "Separate when equal? Racial inequality and residential segregation," Journal of Urban Economics, Elsevier, vol. 82(C), pages 32-48.
  • Handle: RePEc:eee:juecon:v:82:y:2014:i:c:p:32-48
    DOI: 10.1016/j.jue.2014.05.002
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    More about this item

    Keywords

    H0; J7; R0; R2; Segregation; Racial inequality; Neighborhood formation; Negative feedback loop; General equilibrium;

    JEL classification:

    • H0 - Public Economics - - General
    • J7 - Labor and Demographic Economics - - Labor Discrimination
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General
    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis

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