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Moving on up

A report by the Pew Research Center finds that the extent to which Americans live in neighborhoods populated by people similarly well-off has grown since 1980. The share of upper-income households situated in affluent neighborhoods has risen from 9 percent to 18 percent. The share of lower-income household located in mostly poor neighborhoods is now 28 percent, compared to 23 percent in 1980, according to the report. Meanwhile, the percentage of neighborhoods that are predominantly middle class has fallen. (Neighborhoods are defined in the study by census tract).

If President Obama plans to use federal policy to push folks back into the city and close-in suburbs, as Stanley Kurtz believes to be the case, then the Pew study is a timely one.

In the meantime, Pew and the Washington Post see the results as the product of growing income inequality. It’s plausible to believe increasing income inequality would be associated with fewer middle class neighborhoods. And fewer middle class neighborhoods would tend to mean less co-mingling of different income groups.

However, the study shows huge differences in the amount of “residential segregation” from city to city, and these disparities don’t look they can be explained by differences in the amount of income inequality in the cities in question. For example, in Houston 24 percent of upper-income families living in high-income census tracts; in Boston the percentage is 8 percent. It seems, then, that other, more powerful drivers are at work here.

Not surprisingly, certain cultural changes that have occurred over the past 30 plus years go unexamined. One shift is the growth of families in which both parents work full-time, and the percentage of well-off families in which both parents hold high-paying jobs. When a mother works full-time, it stands to reason that the character of the family’s neighborhood matters more than when a mother is at home and able to oversee her children. This might explain why high income families are more desirous of living in well-off neighborhoods than they were in 1980.

A second shift is the growth of the single-parent family. A single mom who does not earn enough to live in a middle class neighborhood might well be able to do so if she were married, as she more likely would have been in 1980.

A third shift is the rise of the “exurbs,” newly built developments beyond the existing suburbs. It may be that newer communities naturally tend to be more segregated by income than older communities that have experienced waves of population.

A fourth shift, which Pew acknowledges, is the increase of Hispanic immigrants. We can be pretty sure that this is an important driver because Pew finds the most residential segregation in Houston and Dallas, followed by Miami. (San Antonio also rates high when smaller cities are included). Presumably, immigrants from the same background will want to live in the same neighborhoods, where the culture is familiar. And, to the extent that recent immigrants are low earners, they will typically lack the option of living in a middle class neighborhood.

At the end of the day, it doesn’t shock my conscience that 18 percent of high-earners live in affluent neighborhoods. Frankly, I’m surprised the number isn’t higher.

In any event, where people live is not a proper concern of the government. So, while the Pew study may be interesting, it should have no public policy implications.

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