Persistent racial inequality in the United States

5 The effects of segregation

Although the era of Jim Crow segregation ended in the 1960s, the racial segregation which continues to characterize U.S. regions, cities, and towns remains an important mechanism suppressing Black economic mobility and opportunity. Although explicitly race-based laws are banned, spatially segregating a group makes it relatively easy to use policies based on geography instead of race to implement discrimination.

For example, nominally race-neutral voter ID laws are aimed at disenfranchising Black voters. Since Black neighborhoods are less likely to have easy access to government buildings where such IDs can be obtained, these laws disproportionately disenfranchise Black voters. Such laws would not have the same effect if racial segregation was less pronounced.

Access to jobs

Segregation inhibits Black access to employment in broadly two ways: spatial and social isolation.

spatial mismatch hypothesis

The hypothesis that minorities living in segregated neighborhoods—especially in urban areas—experience poor labor market outcomes not simply due to labor market discrimination, but also because they are physically distant from good job opportunities.

According to the spatial mismatch hypothesis, restricted residential options for Black people and the relocation of many firms to White suburbs contribute to the high unemployment and low incomes of Black workers, especially those in urban areas.

There are several mechanisms at work:

1. If a person lives far from areas with high job growth and opportunities, they are less likely to know about job openings there.
2. Even if a Black worker knows about a job opening in the suburbs or a different part of the city, they may not be able to get there easily, either because they don’t have a car or because the public transit infrastructure is inadequate or overly time-consuming. (This issue is heightened by the racially unequal access to public transit within most cities.)
3. Employers located far from Black neighborhoods are more likely to discriminate against Black workers.
4. Black workers may fear venturing into overly White areas.

Compounding the effects of spatial mismatch is the social isolation which results from segregation. When job-seeking, workers frequently use their personal networks—friends, family, friends of friends—to learn about job openings and get hired. Given that racial segregation entails largely unconnected Black and White social networks, Black workers have a limited capacity to benefit from such practices because Black unemployment rates are higher and White people are more likely to own businesses or be in a strong position to affect hiring decisions.

As with labor market discrimination, the consequences of social and spatial isolation in the labor market accumulate and get passed on: a Black worker with less access to lucrative social networks will be likely to have children who also lack such access.

Exercise 5 Measuring segregation

Using a new measure of segregation called the “divergence index,” researchers at the University of California, Berkeley created a ranking of cities and metro areas by how segregated they are.

1. Find the city or metro area closest to you (or choose one you are interested in or know of from books or movies). Where on this list does it rank?
2. Now, look at the list of metro regions with the greatest change in the level of segregation. Has your chosen city/region seen increased or decreased segregation over the last 30 years? What do you think has caused these changes?

Exercise 6 Social networks and employment

1. Looking at your own employment history, how important would you say social connections have been? If you have a limited employment history, ask someone you know with more experience.
2. Could we design policies to reduce the importance of our social connections in hiring? Would such a goal further a given normative objective such as efficiency or fairness?

Education

Although the U.S. Supreme Court’s decision in Brown v Board of Education ended formal segregation in education and led to widespread desegregation, the last few decades have seen slowly rising levels of school segregation nationwide (Figure 9). In 2015, around 40% of Black students attended an “intensely segregated” school, defined as fewer than 1 in 10 of the students being White. There have been numerous reasons for this reversal of desegregation efforts, including:

• A series of Supreme Court rulings, which weakened or eliminated mandates for school integration
• Lax enforcement and defunding of integration mandates and programs
• Ongoing White migration to the suburbs and other prosperous non-urban areas
• Using school vouchers to increase enrollment in private schools (some of which were created with the explicit purpose of evading integration mandates)
• Redrawing school districts (or creating new ones) with the intention of making districts more racially segregated

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Figure 9 Intense segregation of Black students across time and region. To be intensely segregated means attending a school whose student body is at least 90% minority.

Will McGrew. 2019. “U.S. school segregation in the 21st century”. Washington Center for Equitable Growth. Updated 15 October 2019.

Segregation results in educational inequality: even when comparing poor White districts to poor Black districts, the latter receive about $1,300 less per pupil in funding. Some of this difference in school quality is due to the differences in government spending and tax revenue. U.S. schools are often funded out of local taxes on property values in the school district. The structure of local taxes for schooling means that racial segregation and racial gaps in housing values (and thus wealth) between White and Black districts result in schools with different amounts of funding. The decentralized structure of school funding thus amplifies the effect of segregation on educational inequality. But even in parts of the U.S. where government funding is somewhat equalized across schools, differences in parental income result in differences in school resources, as richer parent associations are able to secure more funding.

For both reasons, schools with large shares of poor and minority (both Black and Hispanic) students receive less funding, and so offer fewer courses, have fewer textbooks, fewer arts and science resources, less well-trained and experienced teachers, and lower teacher morale. Such schools also see higher rates of teacher turnover.

The combination of high levels of segregation and poverty compound the educational disadvantages experienced by Black students. A report from 2017 found that Black children are more than twice as likely as White children to attend a school where at least half the students were eligible for free or reduced-price lunch.¹ The composition of the teacher workforce in K-12 education is also a problem. Research shows that especially for non-White students, having teachers who resemble them is important for their educational outcomes. However, current K-12 teachers are overwhelmingly White and female, a fact that especially disadvantages Black boys, as they are then least likely to have teachers who look like them.² Due to lower expectations of teachers and guidance counselors, as well as fewer social and material resources of parents and school districts, Black and poor minority students are also more likely to be tracked into non-college or vocational pathways from an early age.³

These differences in education become barriers to college attendance. Figure 10 shows one consequence of these phenomena.

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Figure 10 College education by race and gender from 1940 to 2020.

Authors’ tabulations of American Community Survey data (2001–2020) and decennial Census data (1940–2000) using IPUMS.

In an economy where a college degree is increasingly required for access to well-paying work, the poor educational resources available to many Black communities keeps Black workers disproportionately in lower-paying and menial jobs. The persistence of segregation in education means that even the children of Black middle- and upper-class families are more likely than their White counterparts to suffer from poor school resources. This makes it harder for educated Black parents to pass the benefits of their education on to their children and produces downward mobility.

Effects of spatially concentrated poverty

Possibly the most important consequence of racial segregation is the way it concentrates poverty in neighborhoods.

Figure 11 shows the average neighborhood poverty levels for White and Black children born between 1985 and 2000. Black children are far more likely to have grown up in areas where at least 20% of residents were living at poverty levels. Upper- and middle-class Black families are more exposed to poverty compared to their White peers: a middle- or upper-class Black family is about 50 times more likely to live in a neighborhood with at least a 20% poverty rate compared to similar White families.

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Figure 11 Average neighborhood poverty levels during childhood among Black and White children in different generations.

Patrick Sharkey. 2009. “Neighborhoods and the black-white mobility gap”. Economic Mobility Project.

Neighborhood poverty levels are a critical determinant of a child’s economic future and help explain why children of middle-class Black parents are far more likely to be poorer than their parents than are the children of middle-class White parents. The sociologist Patrick Sharkey sums up why neighborhood poverty is so important in explaining the racial gap in economic mobility:

Even if a white and a black child are raised by parents who have similar jobs, similar levels of education, and similar aspirations for their children, the rigid segregation of urban neighborhoods means that the black child will be raised in a residential environment with higher poverty, fewer resources, poorer schools, and more violence than that of the white child. … While the black child’s parents may have the same amount of income and the same education as the parents of the white child, neighborhood inequality means that the black child is likely to be surrounded by peers who have been raised by parents with less education and fewer resources to devote to their children, less cultural capital and social connections to draw upon. While the white child is likely to be surrounded by peers who aspire to go to college, the black child is more likely to be surrounded by peers who fear going to prison.⁴

Sharkey’s model can help us understand how the segregation of neighborhoods contributes to disadvantages persisting and accumulating across generations (Figure 12).

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Figure 12 Positive feedback cycle of segregation and neighborhood poverty.

The economist Thomas Schelling studied another model of how segregation could emerge and persist despite an absence of deliberately segregationist policies. In this model, clearly illustrated in the animation “The Parable of the Polygons,” it takes only a slight preference for same-race neighbors to generate complete segregation.