Economic Segregation and Urban Growth

Abstract

Many studies have investigated the socioeconomic consequences of residential economic segregation in U.S. urban areas. These studies mainly focus on the impact of economic segregation on the poor or minorities and almost universally find that economic segregation hurts these groups in many ways. However, few studies investigate how economic segregation relates to the economic growth of an urban area as a whole. While there are papers that study this issue theoretically, empirical evidence is lacking. The motivation of this paper is to fill this gap. Using U.S. census data, this study documents a significant negative relationship between the initial levels of economic segregation in 1980 and the subsequent economic growth, indexed by metropolitan population growth, in 1980-2000 in U.S. metropolitan statistical areas (MSAs). Holding other things constant, MSAs having higher initial levels of economic segregation experienced substantially slower subsequent population growth.