Racial segregation is a longstanding explanation for a range of social and economic disparities. However, because racial segregation is a complex phenomenon that reflects decisions made by individuals, employers, and governments, it is difficult to know how segregation causes these disparities.
In their paper, “The Effects of Racial Segregation on Intergenerational Mobility: Evidence from Historical Railroad Placement,” three researchers look at how segregation shapes intergenerational mobility for Black and White Americans. The authors — University of Texas at Austin Associate Professor of Economics Eric Chyn, UCLA Assistant Professor of Behavioral Economics Kareem Haggag, and Philadelphia Fed Economic Advisor and Economist Bryan A. Stuart — focus on the racial segregation that emerged close to railroads built in the 19th century. These railroads created formidable barriers between Black and White neighborhoods. “When Black migrants arrived in a city,” the authors report, “previously-built railroads served as visible markers” that facilitated segregation.
The study portrays how living in a segregated area can affect a person’s earnings over the long term. To ensure a thorough accounting of segregation’s effects on personal income across the U.S., the authors calculated changes in upward mobility across 121 metropolitan areas.1
The background for their analysis is the Great Migration. From 1915 to 1970, 6 million Black Americans fled the South in search of economic and social opportunities in northern cities. The transformation of these cities, in turn, makes them good subjects for studying the effects of segregation.
For decades, scholars have examined the determinants of economic mobility, and the resulting body of research runs broad and deep. Chyn, Haggag, and Stuart contribute to this research by isolating the role of racial segregation. Their results indicate that segregation crimps upward mobility for children of families across the income spectrum — Black children most acutely (especially those from poorer families), though White children from poorer families suffer negative consequences as well. In community after community, segregation casts a long shadow: As segregation increases, so does the likelihood that children will earn less later in life.
Having produced evidence of segregation’s effects on income, the researchers aim to discern consequences for other measures of well-being. Their findings reveal that higher levels of segregation are associated with higher rates of two outcomes: more young men in jail and more teenagers becoming pregnant. In both cases, Black and White children bear these effects of segregation, though Black children fare worse than White children.
The authors also find that higher levels of segregation are associated with lower academic performance in primary school — further evidence that segregation harms more than just income. Segregation, they explain, sets in motion headwinds that profoundly shape a child’s future, sapping children of their “human capital.”
To understand why racial segregation lowers economic mobility, the authors examine two mechanisms. First, they show that racial segregation reduces government spending per person, including in education, public safety, and health and welfare. Then, they analyze the attitudes and political preferences of White and Black residents in more-segregated vs. less-segregated areas. As segregation increases, so does White residents’ opposition to programs and policies that support lower-income residents and minorities. This pattern is not evident for Black residents.
The authors note, however, that their conclusions probably understate the limitations imposed on children by segregation. After all, isn’t segregation likely to have harmful effects on psychological health? On physical safety? “Given the challenge of quantifying these different channels,” the authors write, “we view [our calculations] as only suggestive of the aggregate reductions in children’s long-run opportunities.”
After documenting their discoveries about the reach of segregation’s effects, and after pinpointing segregation’s prominence in many U.S. metro areas, the authors close with a hopeful look to the future, reminding us that opportunities exist for policies that help children from segregated areas improve their chances of advancing economically.