Business & Economics

Geography of inequality

Claude Fischer

One vision of the digital electronic future is that it would “erase” place and space. One can Skype over a cell phone with people half a globe away. A law firm can send audio to India and get back transcriptions in the morning. A firm in California can order goods from Korea and have them shipped to a customer in Europe. The vision that all places are one is not new. Over a hundred years ago a journalist wrote that, thanks to the telephone, by our time everyone would live on their own mountain top and do their work over the electronic wire. Didn’t happen then; isn’t happening now. Where you live and work seems to matter economically and culturally at least as much now as decades ago. The obvious example is the continuing concentration of the IT industries themselves – Silicon Valley, Silicon Alley, Silicon Wadi, etc. (here).

uptown Chicago

uptown Chicago (Wikimedia)

This musing is occasioned by a recent article in the Times occasioned by a report from the Brookings Institution on how American metropolitan areas are becoming increasingly different from one another with respect to the educational levels of their residents. Some places, like Washington, Boston, and San Francisco are experiencing growing concentrations of the college-educated; others like Las Vegas, Memphis, and Dayton are falling further behind. Early followers of this blog will have read of this trend 16 months ago and of a related trend, the concentration of twenty- and thirty-something college graduates in particular downtown neighborhoods of those cities.  But why does this matter?

Class segregation

Beverly Hills

Beverly Hills (Wikimedia)

Segregation by education and income – the two are highly correlated – has been around a long time. In the 19th century, city folk were more educated and affluent than country folk; as suburbs expanded in the early- and mid-20th century, that’s were where the better-educated (and wealthier) flocked. And now we are getting even more separation between the better- and the less-educated, both between metro areas as the Times story described and between neighborhoods within metro areas (see, e.g., here and here).

The figure below, from Kendra Bischoff and Sean Reardon, in the Boston Review, shows the growth in income segregation, by neighborhood, in the U.S. since 1970. It shows that the percentage of American families that live in either well-off or poor neighborhoods has increased. What is striking in the new reports is that we are seeing education segregation moving in the same way.

graph

Biischoff-Reardon (Boston Review)

Greater segregation by class matters to the extent that place itself matters, the extent to which where we live and, especially among whom we live, affects our own lives. Americans clearly believe that place matters a lot; that is why they spend so much more money to buy or rent homes in “better neighborhoods”; that is why the three principles of real estate are location, location, and location. Research backs up this intuition.

Although there are complex statistical issues involved, studies generally suggest that kids do better in school if the kids around them do better in school and kids are less likely to get into trouble if the kids in the neighborhood are less likely to; that households are safer from crime if the blocks around them are safer; that people do better economically when those around them do better; that if your neighbors are well-off you tend to have access to nice public resources but if they are poorly-off you are more likely to breath noxious fumes; and so on. (For a roundup of evidence on these matters, see Rob Sampson’s book on the “enduring neighborhood effect”; a couple of illustrative studies are here and here.)

Thus, as metro areas and neighborhoods become increasingly different from one another, some becoming extremely different, more people (critically, more children) are living in places that are either especially conducive to thriving or especially unfavorable for thriving. Geography still matters and it is another way that the inequality cycle spins faster and faster.

Cross-posted from Claude Fischer’s blog, Made in America: Notes on American life from American history.

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Comments to "Geography of inequality":
    • Peter Gogol

      Elizabeth Warren touches on this some in her book The Two Income Trap. She argues that a desire to live in high quality public school districts is a key reason why families are so willing to plunk down the big bucks to live in specific neighborhoods. Following this line of thought, one way to remedy this arms war in real estate would be to focus on improving public school systems.

      My memory is little foggy, but I think one of Ms. Warren’s proposals was to permit public school districts to be a little less location-based and to compete for students, with various incentives to encourage economic diversity within schools. I can imagine something like this working in the Kansas City area, where I live.

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    • M.A.D.

      It is true that people are separating in terms of education and standard of living. People behave in the same manner as their neighbors do. So, location has created a huge gap amongst people.

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