The more segregated an metro area is, the worse the economic prospects of the poor and people of color

Our City Observatory report, Lost in Place, closely tracks the growth of concentrated poverty in the nation’s cities; this is particularly important because of the widespread evidence of the permanent damage high-poverty neighborhoods do to children of poor families.

Two recent studies shed additional light on the importance of economic and racial integration to the life chances of students from low income families and children of color.

Writing in the journal Social Problems, Lincoln Quillan explores the question “Does Segregation Create Winners and Losers?” Quillian uses data from the Panel Study of Income Dynamics, a federal survey program that gathers longitudinal data on a representative group of Americans over several decades.

Quillian shows that increases in segregation at the metropolitan level are associated with lower rates of high school completion for poor and black students. Poor and black students that live in more segregated metropolitan areas are less likely to graduate from high school after controlling for other observable factors that influence individual success, such as the level of their parents’ education. Significantly, higher rates of segregation do not appear to have any statistically significant effects on the high school completion rates of whites or the non-poor. Taken together, these findings suggest that increasing racial and economic integration improves the educational outcomes for black and poor students without any negative effect on the educational outcomes of white and non-poor students.

This is important. If increased economic integration does not affect educational prospects for higher-income students, then the myth that having more integrated neighborhoods will “drag down” the potential success for the current residents is just that: a false myth. The implication of this research for housing policy is particularly salient.

In another article, published in the Annals of the American Academy of Political and Social Science, Sean Reardon, Lindsay Fox, and Joseph Townsend look at the trends in income segregation. Using data from the American Community Survey, they look at the trends behind the growing overall levels of income segregation in most metropolitan areas.

Their analysis finds that aggregate household income segregation has increased mostly because of the increasing isolation of the highest income households from low- and moderate-income households. This is what Robert Reich famously labeled “the secession of the successful.” Higher-income households are more likely to live in neighborhoods with other high-income households than was true two three decades ago. The authors also estimate changes in income segregation for each of the 50 largest metropolitan areas in the nation. They point out wide variations across the country.

Differences in income levels and residential segregation patterns among metropolitan areas produce very different experiences for the urban poor in different metros. In some higher income metro areas with less segregation, the poorest residents live in neighborhoods with noticeably higher incomes than the poorest residents of poorer, more segregated metros. For example, those in the tenth percentile of household income in Washington D.C. and Minneapolis live in neighborhoods that have average household incomes equal to the levels experienced by the median-income households in Atlanta and Los Angeles. You can see these differences in the figure below, excerpted from the paper:

Reardon Figure 4

This plots household income against neighborhood income. Most metros are similar, with the typical low-income family living in a neighborhood with a median income of $45K. Washington and Minneapolis have higher average incomes and are more economically integrated than other large metropolitan areas. Families in the lowest 25th percentile in these cities live in neighborhoods with median incomes of $60,000 (Minneapolis) and $70,000 (Washington). In the typical large metro area, you have to have an income of $75,000 (or more) to have such well-to-do neighbors.

Finally, this paper also presents major findings on racial integration and associated effects on economic integration. Black and Hispanic households tend to be highly concentrated into black and Hispanic neighborhoods, which has implications for poverty and economic mobility that we outline in our report here and blog post here. Most importantly, households with the same yearly income live in very different neighborhoods depending on their race:

“Black middle-class households (with incomes of roughly $55-$60,000), for example, typically live in neighborhoods with median incomes similar to those of very poor white households (those with incomes of roughly $12,000). For Hispanic households the disparity is only slightly smaller. Moreover, even high-income black and Hispanic households do not achieve neighborhood income parity with similar-income white households.”

While the growing gap between rich and poor is capturing greater policy attention, these two studies remind us that the spatial patterns of integration within metropolitan areas have a big impact on the quality of life and life prospects, especially of low-income households. It also indicates that how we build and inhabit our cities influences educational attainment and economic success, have an important role in ameliorating the effects of income inequality, which can have long-lasting impacts on city-wide educational attainment and economic success.

A hat tip to City Observatory’s friend Bridget Marquis for flagging these articles.