Are Ghettos Good or Bad?

68 Pages Posted: 13 Jul 2000 Last revised: 31 Aug 2010

See all articles by David M. Cutler

David M. Cutler

Harvard University - Department of Economics; National Bureau of Economic Research (NBER); Harvard University - Harvard Kennedy School (HKS)

Edward L. Glaeser

Harvard University - Department of Economics; Brookings Institution; National Bureau of Economic Research (NBER)

Date Written: June 1995

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

Cutler, David M. and Glaeser, Edward L., Are Ghettos Good or Bad? (June 1995). NBER Working Paper No. w5163. Available at SSRN: https://ssrn.com/abstract=225227

David M. Cutler (Contact Author)

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Edward L. Glaeser

Harvard University - Department of Economics ( email )

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