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Are Ghettos Good or Bad?

Author

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  • David M. Cutler
  • Edward L. Glaeser

Abstract

Theory suggests that spatial separation of racial and ethnic groups can have both positive and negative effects on the economic performance of minorities. Racial segregation may be damaging because it curtails informational connections with the larger community or because concentrations of poverty deter human capital accumulation and encourage crime. Alternatively racial segregation might ensure that minorities have middle-class role models and thus promote good outcomes. We examine the effects of segregation on African-American outcomes in schooling, employment and single parenthood and find that African-Americans in more segregated areas do significantly worse, particularly if they live in central cities. We control for the endogeneity of location choice using instruments based on political factors, topographical features of cities, and residence before adulthood. Some, but never more than 40% of this effect, stems from lack of role models and large commuting times.

Suggested Citation

  • David M. Cutler & Edward L. Glaeser, 1995. "Are Ghettos Good or Bad?," NBER Working Papers 5163, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:5163
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    References listed on IDEAS

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    1. Edward L. Glaeser & Bruce Sacerdote & José A. Scheinkman, 1996. "Crime and Social Interactions," The Quarterly Journal of Economics, Oxford University Press, vol. 111(2), pages 507-548.
    2. Caroline M. Hoxby, 2000. "Does Competition among Public Schools Benefit Students and Taxpayers?," American Economic Review, American Economic Association, vol. 90(5), pages 1209-1238, December.
    3. Katherine M. O'Regan & John M. Quigley, 1996. "Teenage Employment and the Spatial Isolation of Minority and Poverty Households," Journal of Human Resources, University of Wisconsin Press, vol. 31(3), pages 692-702.
    4. Ihlanfeldt, Keith R & Sjoquist, David L, 1990. "Job Accessibility and Racial Differences in Youth Employment Rates," American Economic Review, American Economic Association, vol. 80(1), pages 267-276, March.
    5. Chiswick, Barry R., 1991. "Jewish immigrant skill and occupational attainment at the turn of the century," Explorations in Economic History, Elsevier, vol. 28(1), pages 64-86, January.
    6. Edward P. Lazear, 1999. "Culture and Language," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages 95-126, December.
    7. Borjas, George J, 1995. "Ethnicity, Neighborhoods, and Human-Capital Externalities," American Economic Review, American Economic Association, vol. 85(3), pages 365-390, June.
    8. repec:hoo:wpaper:e-94-11 is not listed on IDEAS
    9. Cutler, David M & Elmendorf, Douglas W & Zeckhauser, Richard J, 1993. "Demographic Characteristics and the Public Bundle," Public Finance = Finances publiques, , vol. 48(Supplemen), pages 178-198.
    10. Case, A.C. & Katz, L.F., 1991. "The Company You Keep: The Effects Of Family And Neighborhood On Disadvantaged Younths," Harvard Institute of Economic Research Working Papers 1555, Harvard - Institute of Economic Research.
    11. Glaeser, Edward L & Mare, David C, 2001. "Cities and Skills," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 316-342, April.
    12. Roland Benabou, 1993. "Workings of a City: Location, Education, and Production," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 619-652.
    13. repec:hoo:wpaper:e-95-2 is not listed on IDEAS
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    Citations

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    Cited by:

    1. Harry J. Holzer & Keith R. Ihlanfeldt, 1998. "Customer Discrimination and Employment Outcomes for Minority Workers," The Quarterly Journal of Economics, Oxford University Press, vol. 113(3), pages 835-867.
    2. Julie Berry Cullen & Steven D. Levitt, 1999. "Crime, Urban Flight, And The Consequences For Cities," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 159-169, May.
    3. Catherine Bros, 2008. "Power distribution and endogenous segregation," Post-Print halshs-00204974, HAL.
    4. Harry J. Holzer & Keith R. Ihlanfeldt, 1996. "Spatial factors and the employment of blacks at the firm level," New England Economic Review, Federal Reserve Bank of Boston, issue May, pages 65-86.
    5. William Levernier & Mark D. Partridge & Dan S. Rickman, 2000. "The Causes of Regional Variations in U.S. Poverty: A Cross-County Analysis," Journal of Regional Science, Wiley Blackwell, vol. 40(3), pages 473-497.
    6. Maria da Piedade Morais & Bruno de Oliveira Cruz & Carlos Wagner de Albuquerque Oliveira, 2015. "Residential Segregation and Social Exclusion in Brazilian Housing Markets," Discussion Papers 0122, Instituto de Pesquisa Econômica Aplicada - IPEA.
    7. Alberto Alesina & Reza Baqir & William Easterly, 1999. "Public Goods and Ethnic Divisions," The Quarterly Journal of Economics, Oxford University Press, vol. 114(4), pages 1243-1284.
    8. Michael Kremer, 1996. "How Much Does Sorting Increase Inequality?," NBER Working Papers 5566, National Bureau of Economic Research, Inc.
    9. 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.
    10. Addison, Tony & Rahman, Aminur, 2001. "Why is so Little Spent on Educating the Poor?," WIDER Working Paper Series 029, World Institute for Development Economic Research (UNU-WIDER).

    More about this item

    JEL classification:

    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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