The Wrong Side(s) of the Tracks: The Causal Effects of Racial Segregation on Urban Poverty and Inequality

Elizabeth Oltmans Ananat

American Economic Journal: Applied Economics, 2011, vol. 3, issue 2, 34-66

Abstract: A striking negative correlation exists between an area's residential racial segregation and its population characteristics, but it is recognized that this relationship may not be causal. I present a novel test of causality from segregation to population characteristics by exploiting the arrangements of railroad tracks in the nineteenth century to isolate plausibly exogenous variation in areas' susceptibility to segregation. I show that this variation satisfies the requirements for a valid instrument. Instrumental variables estimates demonstrate that segregation increases metropolitan rates of black poverty and overall black-white income disparities, while decreasing rates of white poverty and inequality within the white population. (JEL I32, J15, N31, N32, N91, N92, R23)

JEL-codes: I32 J15 N31 N32 N91 N92 R23 (search for similar items in EconPapers)
Date: 2011
Note: DOI: 10.1257/app.3.2.34
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Citations: View citations in EconPapers (105)

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