By any of the measures we examine, segregation of families by socioeconomic status has grown significantly in the last 40 years. The proportion of families living in poor or affluent neighborhoods doubled from 15 percent to 33 percent and the proportion of families living in middle-income neighborhoods declined from 65 percent to 42 percent. By this measure, income segregation grew in every decade, with the fastest growth in the last decade.
Why Does Socioeconomic Segregation Matter?
Income segregation may accentuate the economic advantages of high-income families and exacerbate the economic disadvantages of low-income families.
It is useful to distinguish two categories of mechanisms: (1) neighborhood composition mechanisms and (2) spatial resource distribution mechanisms.
Neighborhood composition effects —sociologists and economists call them neighborhood effects — stem from the demographic composition of neighborhoods; e.g., poverty rates, average educational attainment levels, and the proportion of single-parent families.
Spatial resource distribution effects operate when segregation leads to the unequal distribution of collective resources (such as high-quality schools or public parks) and/or public hazards (such as pollution or crime) among neighborhoods.
This distinction is not sharp, but a stylized example will make it clearer.
Suppose that poor neighbors hinder children’s educational success because children observe fewer adults in their neighborhood with high educational attainment, and, by extension, fewer adults who have succeeded in school. Children in high-income neighborhoods observe just the opposite. In this case, income segregation would lead to educational inequality between high- and low-income children because it would produce large differences in children’s access to adult role models. We consider this a neighborhood compositional effect.
Suppose instead that one’s neighbors do not influence school success, but that it is largely determined by the resources in the school; e.g., high-skill teachers. If high-income communities attract those high-skill teachers—for instance, by paying higher salaries—then residential income segregation will lead to unequal school resources among communities, which will in turn lead to inequalities in educational success among high- and low-income children. We consider this a spatial resource distribution effect. In practice, the effects of segregation may include both compositional and distributional components.
Segregation is likely more consequential for children than for adults for two reasons. First, most children spend a great deal of time in their neighborhood, making that immediate context particularly salient for them, while adults generally work and socialize in a larger geographic area. Second, for children, income segregation can lead to disparities in crucial public amenities, like schools, parks, libraries, and recreation.
During the last four decades, the isolation of the rich has been consistently greater than the isolation of the poor. Although much of the scholarly and policy discussion about the effects of segregation and neighborhood conditions focuses on the isolation of poor families in neighborhoods of concentrated disadvantage, it is perhaps equally important to consider the implications of the substantial, and growing, isolation of high-income families.
In 2010, the 10 percent of families with the highest incomes controlled approximately 46 percent of all income in the United States (Saez 2012). The increasing geographic isolation of affluent families means that a significant proportion of society’s resources are concentrated in a smaller and smaller proportion of neighborhoods.This has consequences for low- and middle-income families: the isolation of the rich may lead to lower public and private investments in resources, services, and amenities that benefit large shares of the population, such as schools, parks, and public services.
The impacts of increasing socioeconomic segregation may be substantial. Much of the research on the impact of neighborhood context has focused on how income-segregation shapes the neighborhood contexts of children from low-income families, affects their access to high-quality schools and to adults with high levels of education, and influences their social and educational development.
But perhaps equally important is the impact of segregation on the attitudes, actions, and investments of the most-advantaged families. If socioeconomic segregation means that more advantaged families do not share social environments and public institutions (schools, public services, parks, etc) with low-income families, advantaged families may hold back their support for investments in shared resources. Such a shift in commitment may have far-reaching consequences for the rest of society. Understanding the connection between income segregation and social attitudes, and the willingness to support investment in public goods, is an important topic for future research.