IDEAS home Printed from https://ideas.repec.org/p/ecl/yaleco/9.html
   My bibliography  Save this paper

Separate When Equal? Racial Inequality and Residential Segregation

Author

Listed:
  • Bayer, Patrick

    (Yale U)

  • Fang, Hanming
  • McMillan, Robert

    (U of Toronto)

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.

Suggested Citation

  • Bayer, Patrick & Fang, Hanming & McMillan, Robert, 2005. "Separate When Equal? Racial Inequality and Residential Segregation," Working Papers 9, Yale University, Department of Economics.
  • Handle: RePEc:ecl:yaleco:9
    as

    Download full text from publisher

    File URL: http://economics.yale.edu/sites/default/files/files/Working-Papers/wp000/ddp0009.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. 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.
    2. Bayer, Patrick & McMillan, Robert & Rueben, Kim S., 2004. "What drives racial segregation? New evidence using Census microdata," Journal of Urban Economics, Elsevier, vol. 56(3), pages 514-535, November.
    3. 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.
    4. 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.
    5. Rajiv Sethi & Rohini Somanathan, 2004. "Inequality and Segregation," Journal of Political Economy, University of Chicago Press, vol. 112(6), pages 1296-1321, December.
    6. Elizabeth Oltmans Ananat, 2011. "The Wrong Side(s) of the Tracks: The Causal Effects of Racial Segregation on Urban Poverty and Inequality," American Economic Journal: Applied Economics, American Economic Association, vol. 3(2), pages 34-66, April.
    7. Susan E. Mayer, 2000. "Income Inequality: Economic Segregation and Children's Educational Attainment," Working Papers 0026, Harris School of Public Policy Studies, University of Chicago.
    8. Shelly Lundberg & Richard Startz, 1998. "Race, Information, and Segregation," Working Papers 0047, University of Washington, Department of Economics.
    9. Steven Berry & Joel Waldfogel, 2003. "Product Quality and Market Size," NBER Working Papers 9675, National Bureau of Economic Research, Inc.
    10. Stuart A. Gabriel & Gary D. Painter, 2012. "Household Location And Race: A 20-Year Retrospective," Journal of Regional Science, Wiley Blackwell, vol. 52(5), pages 809-818, December.
    11. Vigdor, Jacob L., 2003. "Residential segregation and preference misalignment," Journal of Urban Economics, Elsevier, vol. 54(3), pages 587-609, November.
    12. Patrick Bayer & Robert McMillan & Kim Rueben, 2004. "Residential Segregation in General Equilibrium," Working Papers 885, Economic Growth Center, Yale University.
    13. Collins, William J. & Margo, Robert A., 2000. "Residential segregation and socioeconomic outcomes: When did ghettos go bad?," Economics Letters, Elsevier, vol. 69(2), pages 239-243, November.
    14. 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.
    15. Schelling, Thomas C, 1969. "Models of Segregation," American Economic Review, American Economic Association, vol. 59(2), pages 488-493, May.
    16. Vincent P. Miller & John M. Quigley, 1990. "Segregation by Racial and Demographic Group: Evidence from the San Francisco Bay Area," Urban Studies, Urban Studies Journal Limited, vol. 27(1), pages 3-21, February.
    17. Jan K. Brueckner & Stuart S. Rosenthal, 2009. "Gentrification and Neighborhood Housing Cycles: Will America's Future Downtowns Be Rich?," The Review of Economics and Statistics, MIT Press, vol. 91(4), pages 725-743, November.
    18. Durlauf, Steven N, 1996. "A Theory of Persistent Income Inequality," Journal of Economic Growth, Springer, vol. 1(1), pages 75-93, March.
    19. 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.
    20. LeRoy, Stephen F. & Sonstelie, Jon, 1983. "Paradise lost and regained: Transportation innovation, income, and residential location," Journal of Urban Economics, Elsevier, vol. 13(1), pages 67-89, January.
    21. David M. Cutler & Edward L. Glaeser, 1997. "Are Ghettos Good or Bad?," The Quarterly Journal of Economics, Oxford University Press, vol. 112(3), pages 827-872.
    22. Benabou, R., 1991. "Location, Education, and Production," Working papers 582, Massachusetts Institute of Technology (MIT), Department of Economics.
    23. 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.
    24. 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.
    25. Weinberg, Bruce A., 2000. "Black Residential Centralization and the Spatial Mismatch Hypothesis," Journal of Urban Economics, Elsevier, vol. 48(1), pages 110-134, July.
    26. Coate, Stephen & Loury, Glenn C, 1993. "Will Affirmative-Action Policies Eliminate Negative Stereotypes?," American Economic Review, American Economic Association, vol. 83(5), pages 1220-1240, December.
    27. Patrick Bayer & Robert McMillan, 2005. "Racial Sorting and Neighborhood Quality," NBER Working Papers 11813, National Bureau of Economic Research, Inc.
    28. John F. Kain, 1968. "Housing Segregation, Negro Employment, and Metropolitan Decentralization," The Quarterly Journal of Economics, Oxford University Press, vol. 82(2), pages 175-197.
    29. Glenn C. Loury, 1976. "A Dynamic Theory of Racial Income Differences," Discussion Papers 225, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    30. Rajiv Sethi & Rohini Somanathan, 2001. "Racial Income Disparities and the Measurement of Segregation," Urban/Regional 0107001, EconWPA.
    31. Glaeser, Edward L. & Kahn, Matthew E. & Rappaport, Jordan, 2008. "Why do the poor live in cities The role of public transportation," Journal of Urban Economics, Elsevier, vol. 63(1), pages 1-24, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.
    2. H. Spencer Banzhaf & Randall P. Walsh, 2010. "Segregation and Tiebout Sorting: Investigating the Link between Investments in Public Goods and Neighborhood Tipping," NBER Working Papers 16057, National Bureau of Economic Research, Inc.
    3. Florent Dubois & Christophe Muller, 2017. "Decomposing Well-being Measures in South Africa: The Contribution of Residential Segregation to Income Distribution," Working Papers halshs-01520311, HAL.
    4. Guerrieri, Veronica & Hartley, Daniel & Hurst, Erik, 2013. "Endogenous gentrification and housing price dynamics," Journal of Public Economics, Elsevier, vol. 100(C), pages 45-60.
    5. Patrick Bayer & Robert McMillan, 2005. "Racial Sorting and Neighborhood Quality," NBER Working Papers 11813, National Bureau of Economic Research, Inc.
    6. David Card & Alexandre Mas & Jesse Rothstein, 2008. "Tipping and the Dynamics of Segregation," The Quarterly Journal of Economics, Oxford University Press, vol. 123(1), pages 177-218.
    7. Judith K. Hellerstein & Melissa McInerney & David Neumark, 2011. "Neighbors and Coworkers: The Importance of Residential Labor Market Networks," Journal of Labor Economics, University of Chicago Press, vol. 29(4), pages 659-695.
    8. repec:gam:jsusta:v:10:y:2018:i:4:p:1114-:d:140098 is not listed on IDEAS
    9. Maria D. C. Garcia­Alonso & Zaki Wahhaj, 2018. "Social Diversity and Bridging Identity," Studies in Economics 1802, School of Economics, University of Kent.
    10. 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.
    11. Rosenthal, Stuart S. & Ross, Stephen L., 2015. "Change and Persistence in the Economic Status of Neighborhoods and Cities," Handbook of Regional and Urban Economics, Elsevier.
    12. Tugce, Cuhadaroglu, 2013. "My Group Beats Your Group: Evaluating Non-Income Inequalities," SIRE Discussion Papers 2013-49, Scottish Institute for Research in Economics (SIRE).
    13. Jessie Bakens & Raymond Florax & Peter Mulder, 2016. "Ethnic Drift and White Flight: A Gravity Model of Neighborhood Formation," Tinbergen Institute Discussion Papers 16-062/VIII, Tinbergen Institute.
    14. Logan, Trevon D. & Parman, John M., 2017. "The National Rise in Residential Segregation," The Journal of Economic History, Cambridge University Press, vol. 77(01), pages 127-170, March.
    15. Florent Dubois & Christophe Muller, 2017. "Segregation and the Perception of the Minority," AMSE Working Papers 1718, Aix-Marseille School of Economics, Marseille, France.
    16. Mariko Nakagawa, 2015. "Segregation patterns in cities: ethnic clustering without skill differences," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 55(2), pages 453-483, December.
    17. Dionissi Aliprantis & Daniel R. Carroll, 2012. "Neighborhood dynamics and the distribution of opportunity," Working Paper 1212, Federal Reserve Bank of Cleveland, revised 01 Feb 2013.
    18. 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 Evaluation of Labour Market and Education Policy.
    19. Weinberg, Bruce A., 2013. "Group design with endogenous associations," Regional Science and Urban Economics, Elsevier, vol. 43(2), pages 411-421.
    20. 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.
    21. Osiris Jorge, Parcero & Adolfo, Cristobal-Campoamor, 2009. "Dynamics of neighborhood formation and segregation by income," MPRA Paper 16936, University Library of Munich, Germany.
    22. Tugce Cuhadaroglu, 2013. "My Group Beats Your Group: Evaluating Non-Income Inequalities," Discussion Paper Series, Department of Economics 201308, Department of Economics, University of St. Andrews.

    More about this item

    JEL classification:

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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecl:yaleco:9. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: () or (Christopher F. Baum). General contact details of provider: http://edirc.repec.org/data/edyalus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.