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What Drives Racial Segregation? New Evidence Using Census Microdata

  • Patrick Bayer
  • Robert McMillan
  • Kim Rueben

Residential segregation on the basis of race is widespread and has important welfare consequences. This paper sheds new light on the forces that drive observed segregation patterns. Making use of restricted micro-Census data from the San Francisco Bay Area and a new measurement framework, it assesses the extent to which the correlation of race with other household characteristics, such as income, education and immigration status, can explain a significant portion of observed racial segregation. In contrast to the findings of the previous literature, which has been hampered by serious data limitations, our analysis indicates that individual household characteristics can explain a considerable fraction of segregation by race. Taken together, we find that the correlation of race with other household attributes can explain almost 95 percent of segregation for Hispanic households, over 50 percent for Asian households, and approximately 30 percent for White and Black households. Our analysis also indicates that different factors drive the segregation of different races. Language explains a substantial proportion - more than 30 percent - of Asian and Hispanic segregation, education explains a further 20 percent of Hispanic segregation, while income is the most important non-race household characteristic for Black households, explaining around 10 percent of Black segregation.

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File URL: ftp://ftp2.census.gov/ces/wp/2002/CES-WP-02-26.pdf
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Paper provided by Center for Economic Studies, U.S. Census Bureau in its series Working Papers with number 02-26.

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Date of creation: Oct 2002
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Handle: RePEc:cen:wpaper:02-26
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  1. Sendhil Mullainathan & Marianne Bertrand & Erzo F.P. Luttmer, 1998. "Network Effects and Welfare Cultures," Working papers 98-21, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Evans, William N & Oates, Wallace E & Schwab, Robert M, 1992. "Measuring Peer Group Effects: A Study of Teenage Behavior," Journal of Political Economy, University of Chicago Press, vol. 100(5), pages 966-91, October.
  3. Miller, Vincent P. & Quigley, John M., 1990. "Segregation by Racial and Demographic Group: Evidence from the San Francisco Bay Area," University of California Transportation Center, Working Papers qt1839w13f, University of California Transportation Center.
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  6. Patrick Bayer & Robert McMillan & Kim Rueben, 2004. "Residential Segregation in General Equilibrium," Working Papers 885, Economic Growth Center, Yale University.
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  11. George J. Borjas, 1994. "Ethnicity, Neighborhoods, and Human Capital Externalities," NBER Working Papers 4912, National Bureau of Economic Research, Inc.
  12. John Yinger, 1978. "The Black-White Price Differential in Housing: Some Further Evidence," Land Economics, University of Wisconsin Press, vol. 54(2), pages 187-206.
  13. 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.
  14. Chambers, Daniel N., 1992. "The racial housing price differential and racially transitional neighborhoods," Journal of Urban Economics, Elsevier, vol. 32(2), pages 214-232, September.
  15. Cutler, David & Vigdor, Jacob & Glaeser, Edward, 1999. "The Rise and Decline of the American Ghetto," Scholarly Articles 2770033, Harvard University Department of Economics.
  16. 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.
  17. Philip Oreopoulos, 2003. "The Long-Run Consequences Of Living In A Poor Neighborhood," The Quarterly Journal of Economics, MIT Press, vol. 118(4), pages 1533-1575, November.
  18. Borjas, George J., 1998. "To Ghetto or Not to Ghetto: Ethnicity and Residential Segregation," Journal of Urban Economics, Elsevier, vol. 44(2), pages 228-253, September.
  19. 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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