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How the Growth in Income Inequality Increased Economic Segregation

  • Susan E. Mayer

Households became more geographically segregated by income in the United States between 1970 and 1990. Economic inequality also increased between 1970 and 1990. Using 1970, 1980, and 1990 Census data, I find that an increase in income inequality at the state level is associated with an increased in economic segregation in the state. The increase in segregation was not mainly the result of a decline in within-neighborhood economic heterogeneity. Economic inequality between households in the same census tract hardly changed between 1970 and 1990. The increase in segregation was mainly due to an increase in the variance of mean neighborhood income. This has important implications for interpreting the consequences of increases in economic segregation and for understanding why economic inequality and economic segregation are related.

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Paper provided by Northwestern University/University of Chicago Joint Center for Poverty Research in its series JCPR Working Papers with number 230.

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Date of creation: 27 Jun 2001
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Handle: RePEc:wop:jopovw:230
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  1. Alberto Alesina & Eliana La Ferrara, 1999. "Participation in Heterogeneous Communities," NBER Working Papers 7155, National Bureau of Economic Research, Inc.
  2. Benabou, Roland, 1996. "Heterogeneity, Stratification, and Growth: Macroeconomic Implications of Community Structure and School Finance," American Economic Review, American Economic Association, vol. 86(3), pages 584-609, June.
  3. La Ferrara, Eliana & Alesina, Alberto, 2000. "Participation in Heterogeneous Communities," Scholarly Articles 4551796, Harvard University Department of Economics.
  4. Steven N. Durlauf, 1992. "A Theory of Persistent Income Inequality," NBER Working Papers 4056, National Bureau of Economic Research, Inc.
  5. Cutler, David M & Glaeser, Edward L, 1997. "Are Ghettos Good or Bad?," The Quarterly Journal of Economics, MIT Press, vol. 112(3), pages 827-72, August.
  6. Dora L. Costa & Matthew E. Kahn, 2001. "Understanding the Decline in Social Capital, 1952-1998," NBER Working Papers 8295, National Bureau of Economic Research, Inc.
  7. 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.
  8. 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.
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