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The Uptick in Income Segregation: Real Trend or Random Sampling Variance

Listed author(s):
  • John R. Logan
  • Andrew Foster
  • Jun Ke
  • Fan Li

Recent studies have reported a reversal of an earlier trend in income segregation in metropolitan regions, from a decline in the 1990s to an increase in the 2000-2010 decade. This finding reinforces concerns about the growing overall income inequality in the U.S. since the 1970s. We re-evaluate the trend. Because the effective sample for the ACS is much smaller than it was for Census 2000, to which it is being compared, there is a possibility that the apparent changes in disparities across census tracts result partly from a higher level of sampling variation and bias due to the smaller sample. This study uses 100% microdata from the 1940 census to simulate the effect of different sampling rates on the observed measure of inequality, drawing from a population at a single point in time so that there is no change in actual income segregation. We find considerable variation in estimates across samples taken from the same population, particularly for smaller samples. The difference between the median estimate using sampling rates comparable to Census 2000 and the ACS is as large as the observed changes since 2000. We propose alternative approaches to calculate unbiased estimates of class segregation.

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File URL: http://www.nber.org/papers/w23656.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 23656.

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Date of creation: Aug 2017
Handle: RePEc:nbr:nberwo:23656
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  1. Petersen, Trond & Penner, Andrew M & Høgsnes, Geir, 2014. "From Motherhood Penalties to Husband Premia: The New Challenge for Gender Equality and Family Policy, Lessons from Norway," Institute for Research on Labor and Employment, Working Paper Series qt2hk409sk, Institute of Industrial Relations, UC Berkeley.
  2. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, vol. 46(1), pages 69-85, January.
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