Download this Paper Open PDF in Browser

Separate When Equal? Racial Inequality and Residential Segregation

51 Pages Posted: 19 Jun 2011 Last revised: 9 May 2012

Patrick J. Bayer

Duke University - Department of Economics; National Bureau of Economic Research (NBER)

Hanming Fang

University of Pennsylvania - Department of Economics; National Bureau of Economic Research (NBER)

Robert McMillan

University of Toronto - Department of Economics

Multiple version iconThere are 3 versions of this paper

Date Written: May 7, 2012

Abstract

This paper introduces a mechanism that, contrary to standard reasoning, may lead segregation in U.S. cities to increase as racial inequality narrows. Speci fically, when the proportion of highly educated blacks rises holding white education fi xed, new middle-class black neighborhoods can emerge, and these are attractive to blacks, resulting in increases in segregation as households re-sort. To examine the importance of this 'neighborhood formation' mechanism in practice, we propose a new two-part research design that yields distinctive cross-sectional and time-series predictions. In cross section, if our mechanism is important, inequality and segregation should be negatively related for older blacks, as we find using both the 1990 and 2000 Censuses. In time series, a negative relationship should also be apparent, particularly for older blacks. Controlling for white education, we show that increased black educational attainment in a city between 1990 and 2000 leads to a signi cant rise in segregation, especially for older blacks, and to a marked increase in the number of middle-class black communities, consistent with neighborhood formation. Of broader relevance, our findings point to a negative feedback loop likely to inhibit reductions in segregation and racial inequality over time.

Keywords: Segregation, Racial Inequality, Neighborhood Formation, Racial Sorting, General Equilibrium, Negative Feedback

JEL Classification: H0, J7, R0, R2

Suggested Citation

Bayer, Patrick J. and Fang, Hanming and McMillan, Robert, Separate When Equal? Racial Inequality and Residential Segregation (May 7, 2012). Economic Research Initiatives at Duke (ERID) Working Paper No. 100. Available at SSRN: https://ssrn.com/abstract=1865965

Patrick J. Bayer (Contact Author)

Duke University - Department of Economics ( email )

213 Social Sciences Building
Box 90097
Durham, NC 27708-0204
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Hanming Fang

University of Pennsylvania - Department of Economics ( email )

160 McNeil Building
3718 Locust Walk
Philadelphia, PA 19104
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Robert McMillan

University of Toronto - Department of Economics ( email )

150 St. George Street
Toronto, Ontario M5S 3G7
Canada
416-978-4190 (Phone)
416-978-6713 (Fax)

Paper statistics

Downloads
106
Rank
86,682
Abstract Views
1,068