Did suburbanization cause residential segregation? Evidence from U.S. metropolitan areas

Transcription

1 Revew of Appled Soco- Economc Research (Volume 9, Issue 1/ 2015), pp. 25 e-mal: Dd suburbanzaton cause resdental segregaton? Evdence from U.S. metropoltan areas Boshampayan Chatterjee 1 1 Insttute of Management Technology, Ghazabad, Inda Abstract. Populaton suburbanzaton has been long held as a cause for ncreasng racal resdental segregaton n US metropoltan areas. Ths paper hypotheszes that rapd suburbanzaton between 1960 and 2000 has caused an ncrease n racal resdental segregaton n U.S. metropoltan areas. Usng the 1947 natonal nterstate hghway plan as an nstrument for suburbanzaton and decennal Census data from 1960 to 2000, ths paper fnds that central cty populaton declne (suburbanzaton) causes racal resdental segregaton n a metropoltan area to rse. Estmaton results from both long dfference and panel regressons are robust to an array of specfcatons. Had there been no suburbanzaton between 1960 and 2000, racal resdental segregaton on average would have declned by about 4 percentage ponts more than what s observed n the data. Keywords: Suburbanzaton, Resdental Segregaton, Hghways, Metropoltan area JEL Codes: R11, R23, R40, J1 1. Introducton Ths paper tres to establsh a lnk between racal resdental segregaton and populaton suburbanzaton by assessng the extent to whch rapd central cty populaton declne (suburbanzaton) explans the observed pattern of racal resdental segregaton n US metropoltan areas. The dea s that f the central ctes lose populaton, of whch most are affluent whtes, then t wll keep the metropoltan areas to reman resdentally segregated. In partcular, the emprcal specfcaton n ths paper tests the hypothess that greater central cty populaton declne causes racal resdental segregaton n a metropoltan statstcal area (MSA) to declne slower over tme. In other words, populaton suburbanzaton rases racal resdental segregaton. The vast lterature on resdental segregaton provdes evdence of hgh segregaton n the Unted States from the tme when ghettos were born. As blacks mgrated to urban areas, ghettos were formed and ctes developed vast areas mostly flled wth black populaton. In 1890, the average urban black was lvng n a neghborhood that was 27 percent black. By 1940, ths percentage went up to 43 percent. Between 1940 and 1970, ghettos consoldated and expanded wth the peak year of segregaton beng In 1970, the average black n US urban areas lved n a neghborhood that was 68 percent black. In 1990 ths percentage was 56 (Cutler, Glaeser, and Vgdor, 1999). On the other hand, populaton declne n US central ctes provdes evdence of rapd suburbanzaton from 1950 onwards. In 1950, 57 percent of MSA resdents were located n the central ctes. In 1970, the share was 43 percent whle n 1990 t was 37 percent (Meszkowsk and Mlls, 1993). A recent study by Baum-Snow (2007) showed that between 1950 and 1990, the total populaton of central ctes n the Unted States declned by 17 percent n spte of populaton growth of 72 percent for the MSAs. Assstant Professor, Insttute of Management Technology, Ghazabad. Tel.: ; fax: E-mal address: bchatterjee@mt.edu.

2 Revew of Appled Soco- Economc Research (Volume 9, Issue 1/ 2015), pp. 26 e-mal: Exstng lterature on segregaton argues that resdental segregaton may rse as neghborhoods expand and people become relatvely more moble. Improvements n the transportaton nfrastructure encourage suburbanzaton as people become ncreasngly able to lve n the suburbs and commute to the cty to work. If ths suburbanzaton s essentally Whte Flght from the cty to the suburbs, then t wll cause US metropols to be more resdentally segregated (Boustan, 2010). Prevous studes dentfy suburbanzaton as one of the causes for the racally segregated pattern of resdental locaton n US metropoltan areas. In partcular, Jackson (1985) emphaszes that federal subsdzaton and encouragement of suburbanzaton renforced racal resdental segregaton. Massey and Denton (1988) fnd Hspanc and Asan segregaton to be strongly related to suburbanzaton but Black- Anglo segregaton was not. Cutler, Glaeser, and Vgdor (1999) regress the ndexes of dssmlarty and solaton on cty populaton and densty and fnd evdence that larger or denser ctes have hgher levels of segregaton. On the other hand, decentralzed racsm and collectve acton racsm (Cutler, Glaeser, and Vgdor, 1999) provde explanaton how racal resdental segregaton may occur because of the ndvdual whtes decson to lve wth other whtes and collectve actons taken by the whtes to enforce separaton from the blacks. Preference to resde among people of lke ncome, educaton, race and ethncty nduces the affluent mddle class to lve n the suburbs. Thus, households wllng to move to ther preferred locaton wll do so f they get the opportunty to relocate. For nstance, n the 1960s, the constructon of nterstate hghway system was consdered as one of the major causes of metropoltan suburbanzaton. The prmary concern that may arse n estmatng the effect of suburbanzaton on resdental segregaton s because of the problem of reverse causalty. As suburbanzaton may affect resdental segregaton, people who want to segregate may choose to suburbanze. The man contrbuton of ths paper s to crcumvent the problem of reverse causalty between resdental segregaton and suburbanzaton by usng nstrumental varables (IV) as an dentfcaton strategy. In partcular, the 1947 natonal nterstate hghway plan s used as an nstrument for suburbanzaton. The motvaton for usng ths nstrument comes from the recent study by Baum-Snow (2007), where he has shown that the constructon of new lmted-access hghways has contrbuted to central cty populaton declne across MSAs n the Unted States. Usng aggregate data at the MSA level for decennal years from 1960 to 2000, regresson equatons are estmated for an array of specfcatons for long dfference and panel settngs. Gven that resdental segregaton and central cty populaton has fallen durng the chosen sample perod of ths study, ths paper fnds that greater declne n central cty populaton causes a lesser declne n racal resdental segregaton n a metropoltan area. The rest of the paper s organzed as follows. Secton 2 dscusses the relatonshp between racal resdental segregaton and suburbanzaton and why nterstate hghway qualfes as an nstrument. Secton 3 dscusses the emprcal methodology and the data. Secton 4 descrbes the trends n suburbanzaton and resdental segregaton. Secton 5 presents the results from the long dfference and panel regressons. Secton 6 concludes. 2. Resdental segregaton, suburbanzaton, and hghways Resdental segregaton on the bass of race can happen when households have drect preference over race or partcular neghborhood characterstcs that vary by race. For nstance, Schellng s (1971) model of neghborhood tppng shows how an all-whte neghborhood, wth resdents havng dfferent tolerance levels toward black neghbors, starts tppng and culmnates nto an all-black neghborhood. Agan, preference of households for local publc goods may lead to resdental stratfcaton on the bass of ncome.

3 Revew of Appled Soco- Economc Research (Volume 9, Issue 1/ 2015), pp. 27 e-mal: Ths Tebout sortng (Tebout, 1956) may generate racal resdental segregaton f race and ncome are correlated. Wth the development of hghway constructon, many resdents of metropoltan areas chose to lve outsde the central urban area and commute to work by automoble or mass transt. Ths process of suburbanzaton s more relevant to the affluent secton of the populaton who can afford to lve n the suburbs. Past studes have observed that between 1950 and 1990, there had been a substantal declne n total populaton of central ctes despte populaton growth n metropoltan area as a whole (Baum-Snow, 2007), and that mostly urban whtes were movng to the suburbs (Boustan, 2010). Durng , central ctes experenced black mgraton from the rural South, and the urban whtes responded to ths black nflux by relocatng to the suburbs. The goal of ths paper s to test the hypothess that rapd suburbanzaton durng 1960 to 2000 has led US metropoltan areas to be more racally segregated. To address the concern of reverse causalty emergng from whtes wllngness to move away from blacks thereby causng suburbanzaton, central cty populaton s nstrumented wth the number of hghways n the 1947 natonal nterstate hghway plan. A recent study by Baum-Snow (2007) shows that one new hghway passng through the central cty reduces ts populaton by about 18 percent. The dentfcaton strategy used n ths paper explots the exogenous varaton n the natonal hghway plan, whch was desgned not to facltate local commutng but to lnk faraway places. As a result, some MSAs that are located nearer to other populaton centers receved relatvely more nterstate hghways than others (Baum-Snow, 2007). Thus the rates of suburbanzaton vared across the metropoltan areas dependng upon the number of hghways assgned to each metropoltan area. The emprcal work n ths paper compares the changes n the level of resdental segregaton across metropoltan areas wth dfferent rates of suburbanzaton. The 1947 natonal nterstate hghway plan s purged of any endogenety because the ntenton of the plan was not to provde people wth hghways so that they can suburbanze, and thus, s not correlated wth resdental segregaton. The hghway plan thus provdes a vald nstrument n the sense that the constructon of new hghways encouraged suburbanzaton but s not drectly correlated wth resdental segregaton n other ways. 3. Emprcal specfcaton and data The effect of suburbanzaton on resdental segregaton s measured by relatng the long run changes n metropoltan area segregaton level to the long run changes n central cty populaton. The man advantage of usng long dfference regressons s that the long run changes of central cty populaton from 1960 to 2000 provde a clear pcture of the suburbanzaton process and the evoluton of the resdental pattern over a long perod. The emprcal specfcaton of the model estmated usng long dfference regressons s descrbed as follows: R S D H G I I A M (1) 9 Y 10 V where R s racal resdental segregaton measured by the dssmlarty ndex and S denotes constant geography central cty populaton n cty. Thus S measures the degree of suburbanzaton. D s a vector of demographc varables, ncludng varables such as MSA populaton, populaton densty, black and foregn born shares.

4 Revew of Appled Soco- Economc Research (Volume 9, Issue 1/ 2015), pp. 28 e-mal: Vector H ncludes varables such as growth potental of ndustres, hstorcal black mgraton, 1950 central cty area and 1950 MSA populaton. G measures 1962 number of local governments n an MSA. I control for segregaton level n 1960, denoted by I, n order to account for the fact that some MSAs had ether low or hgh segregaton to begn wth. Snce dssmlarty ndex can only vary between 0 and 1, extreme values of the ndex at the ntal perod would mply that t would have a undrectonal pattern n ts varaton thereby nflctng bas on the estmated coeffcent of the central cty populaton varable. In 2 addton, I nclude the square of ntal segregaton level ( I ) to account for any nonlnearty present n the data. Fnally, the varables A, M, Y, and V measure agrcultural employment, manufacturng employment, medan famly ncome, and medan gross rent n an MSA. The frst stage of the nstrumental varable regresson s gven by S V 10 PH 0 1 D H 2 3 G I 4 5 I 2 6 A M 7 8 Y where PH s the number of planned hghways n the 1947 natonal nterstate hghway plan for MSA. The IV estmates are obtaned by replacng S n equaton (1) wth the predcted degree of suburbanzaton obtaned from equaton (2). The dentfcaton strategy s to nstrument the changes n central cty populaton wth rays passng through the central cty n the hghway plan. 2 Usng actual hghways poses endogenety problems because whtes may respond to segregaton by buldng more hghways to facltate suburbanzaton, but the hghway plan dd not mean to facltate suburbanzaton and thus does not have ths problem. I use the data from Baum-Snow (2007) on the number of hghways n the 1947 natonal nterstate hghway plan to nstrument central cty populaton. Racal resdental segregaton s measured usng the ndex of dssmlarty proposed by Duncan and Duncan (1955). Ths s a wdely used ndex whch measures the extent to whch blacks and nonblacks occupy dfferent areas of a cty. Ths measure has been used by Cutler, Glaeser, and Vgdor (1999) and s nterpreted as what share of blacks (or whtes) would need to change resdental areas for the races to be evenly dstrbuted. The value of the dssmlarty ndex ranges between 0 and 1. The ndex s calculated at the MSA level and use Census tracts as neghborhoods. Followng Baum-Snow (2007), I use the change n total populaton of the central cty n each metropoltan area for each decennal year from 1960 to 2000 to measure suburbanzaton. I use the central cty populaton data from 1960 to 1990 created by Baum-Snow (2007) where each metropoltan area s assgned wth one central cty. Neghborhood Change Database (NCDB) provdes decennal census data at the tract level. Tracts n year 2000 that fall wthn the 1950 central cty geography are aggregated to obtan the total constant geography central cty populaton n The dataset cover altogether 129 MSAs across the Unted States. County and Cty Data Books (CCDB) s the source of all the demographc varables ncluded n the regresson. CCDB provdes decennal census data aggregated to countes of at least 250,000 nhabtants. County level data on total, black and foregn born populaton are aggregated to form MSAs usng the 1960 standard metropoltan area defnton. The data for the varables ncluded n the vector H come from sources such as 1952 CCDB, Bureau of Economc Analyss (BEA), US Department of Commerce, and 1962 Census of Governments. The data on hstorcal black mgraton are obtaned from the Inter-Unversty Consortum for Poltcal and Socal Research (ICPSR). 9 (2)

5 Revew of Appled Soco- Economc Research (Volume 9, Issue 1/ 2015), pp. 29 e-mal: Regresson equatons are estmated at the MSA level for dfferences between , and OLS and IV regresson models are used to estmate equaton (1), wth the 1947 natonal nterstate hghway plan as an nstrument for suburbanzaton n the IV regressons. In estmatng equaton (1), I also use regonal dummes to absorb any varaton n segregaton across regons. Both OLS and IV regressons for the long-dfference model are run wth census dvson fxed effects. Snce metropoltan areas are unque n many ways, usng a panel data wth metropoltan area fxed effects would control for any tme nvarant heterogenety across MSAs. Usng an exogenous source of varaton n the planned hghways as nstrument would provde estmates of suburbanzaton purged of endogenety arsng from potental reverse causalty. The full model specfcaton used for panel regressons s as follows: Rt 0 1St 2Dt 3Yt 4Vt 5 At 6M t 7W 8Tt W * St t (3) where R t s the measure of resdental segregaton n metropoltan area at year t, D t s a vector of metropoltan area characterstcs, whch ncludes metropoltan populaton, populaton densty, share of black and foregn born populaton and S t s the share of central cty populaton out of total MSA populaton. For the nstrumental varable regressons, S t s substtuted wth the predcted central cty populaton share from the frst stage. Y t, V t, A t and M t denote medan famly ncome, gross medan rent, share of agrcultural and manufacturng employment n MSA at year t respectvely. W and T t are regonal and year dummes capturng regonal and year fxed effects. Regonal dummes are nteracted wth central cty populaton to control for any regonal dfferences n the effect of suburbanzaton on resdental segregaton. Both OLS and IV regressons are estmated wth MSA fxed effects. If resdental locaton patterns take longer than ten years to respond fully to the changes n hghway nfrastructure, then panel estmates wthout smoothng rays wll be based toward zero due to slow transton to new equlbra. (Baum-Snow, 2007). To construct the nstrument for the central cty populaton n a panel settng, I follow Baum-Snow wth a mnor change. Unlke Baum-Snow (2007), central cty populaton s nstrumented wth the number of nterstate hghways n the plan multpled by the fracton of hghway mles completed at tme (t-1). Ths s because hghway constructon lagged by one perod s lkely to be more exogenous than hghway constructon at tme t. The data on mles of hghway completed and opened to traffc for tll 1994 were obtaned from Baum-Snow (2007). The post 1994 data s obtaned from Federal Hghway Admnstraton (FHWA) webste. 13 Year 4. Trends n segregaton and suburbanzaton Table 1. Trends n Resdental Segregaton, Central Cty Populaton, and MSA populaton Average Segregaton Total Cty Populaton Total MSA Populaton MSA wth above average black share Dssmlarty Index Average Cty populaton MSA wth below average black share Dssmlarty Index Average Cty populaton Percent change -25.4% % 89.22% -18.6% -24.5% -29.3% -10.5%

6 Change n Segregaton Change n Segregaton Change n Segregaton ISSN: Revew of Appled Soco- Economc Research (Volume 9, Issue 1/ 2015), pp. 30 e-mal: edtors@reaser.eu Populaton fgures are n mllon. Black share of populaton s defned as above (below) average n an MSA f the black share n that MSA at tme t s greater (lower) than the average black share at tme t. Table 1 provdes an overvew of the trends n black-nonblack resdental segregaton, central cty populaton, and MSA populaton. From Table 1 t can be seen that there has been a substantal populaton movement from the central cty to the suburbs, wth the central cty populaton fallng by 18 percent and MSA populaton rsng by 89 percent between 1960 and One notceable fact n Table 1 s that central cty populaton dropped margnally durng the perod whle there has been a consderable ncrease n MSA populaton n that tme perod. Ths trend n central cty populaton ndcates that MSAs on average were not experencng much suburbanzaton n the post 1990 perod. Resdental segregaton was at ts peak n the 1970 wth the value of the dssmlarty ndex beng.752. From 1970 onwards, segregaton fell persstently wth the value of dssmlarty ndex droppng down to.56 n Ths declne n segregaton level can be attrbuted to rsng ncome and educaton level of blacks wth a change n atttude of the blacks toward lvng n a ghetto (Massey and Denton, 1987). Table 1 also shows the average segregaton level and the central cty populaton accordng to the proporton of black populaton n MSAs. MSAs wth above average and below average black share of populaton had almost the same average level of segregaton n For the later years, MSAs wth above average black share of populaton have hgher segregaton than MSAs wth below average black share. Central cty populaton declned consstently from 1970 onwards for the MSAs wth above average black share. As for the MSAs wth below average black share, average central cty populaton had a downward trend tll 1980 but had rsen by about 30 percent between 1990 and MSAs wth hgher black share experenced greater black n-mgraton than MSAs wth comparatvely lesser black populaton. Suburbanzaton happened at a faster rate n those MSAs as whtes responded to the nflux of black populaton. The man observaton from Table 1 s that the level of the dssmlarty ndex has persstently fallen between 1960 and Agan, central ctes had a substantal populaton loss durng the same tme perod. However, the key s whether the reducton n resdental segregaton s smaller where suburbanzaton s faster. Ths paper attempts to test the hypothess that ctes that experenced greater suburbanzaton had a slower declne n racal resdental segregaton Changes Changes Change n central cty Populaton Change n central cty Populaton Changes Change n central cty Populaton Fg. 1: Suburbanzaton and Change n Racal Resdental Segregaton

7 Revew of Appled Soco- Economc Research (Volume 9, Issue 1/ 2015), pp. 31 e-mal: Fgure 1 gves a graphcal exposton of the relatonshp between the change n resdental segregaton and the change n central cty populaton between , and Hgher negatve values for the change n central cty populaton mples greater declne n central cty populaton, meanng more suburbanzaton. Smlar explanaton holds for the change n resdental segregaton as well. Suburbanzaton and change n resdental segregaton has a negatve relaton for all the three long run changes. Greater central cty populaton loss s assocated wth lesser declne n resdental segregaton. 5. Results Ths secton presents the OLS and IV regresson results from the long dfference and panel regressons correspondng to the equatons (1), and (3). Long Dfference Regresson Results Results n Table 2 show that the change n resdental segregaton s negatvely assocated wth the change n central cty populaton declne. In fact, sgnfcant IV estmates for the change n central cty populaton suggest that suburbanzaton causes metropoltan areas to be more resdentally segregated. For the long dfference IV regresson, a one standard devaton ncrease n suburbanzaton causes resdental segregaton to rse by 5.2 percentage ponts. For and , the effect s about 4.7 and 3.6 percentage ponts respectvely. The frst stage F-statstc rangng between and provdes evdence that the 1947 natonal nterstate hghway plan s a strong predctor of the change n central cty populaton. The causal estmates of the effect of suburbanzaton on resdental segregaton are strong and sgnfcant, especally for the and long dfference regressons. US metropoltan areas experenced consderable loss n central cty populaton between 1960 and Average segregaton level also declned durng that perod. An mplcaton of the results obtaned from the IV regressons n the long dfference model s that the MSAs n whch central ctes experenced greater suburbanzaton had a sgnfcantly lesser fall n racal resdental segregaton. Among the other ndependent varables, hgher black share of populaton has a sgnfcant negatve assocaton wth racal resdental segregaton n all the long dfference regressons. Ths result mght be attrbuted to rsng ncome and educaton level of blacks wth a change n atttude of the blacks toward lvng n a ghetto. The other two varables strongly related to segregaton are the central cty area and the central cty populaton densty. We can see that segregaton s hgher n larger and denser ctes, a result smlar to the one obtaned by Cutler, Glaeser, and Vgdor (1999). The frst thng notceable from Table 2 s that the longer the dfference between the two years, the smaller s the absolute magntudes of the IV estmates. Ths fndng may ndcate that the changes n resdental segregaton and central cty populaton has been the most durng the tme perod and the process of suburbanzaton petered out n the post 1990 perod. Average resdental segregaton consstently dropped durng ths perod, whch mght be attrbuted to amendments n antdscrmnatory polces and changes n atttude of the nonblacks toward the blacks. Secondly, the absolute magntudes of the OLS estmates are bgger, the longer the dfference between the two years. Longer the tme people get, the more they can respond to segregaton by suburbanzng. In that case, the bas arsng from reverse causalty wll be bgger the longer s the perod of the dfference between the two years.

8 Revew of Appled Soco- Economc Research (Volume 9, Issue 1/ 2015), pp. 32 e-mal: OLS IV OLS IV OLS IV Change n log CC populaton * ** ** ** (0.007) (0.027) (0.009) (0.021) (0.011) (0.023) Change n log MSA populaton ** 0.095*** 0.029** 0.031*** (0.050) (0.056) (0.038) (0.027) (0.013) (0.011) Change n CC populaton densty 0.020* 0.042*** * 0.034** 0.042** (0.011) (0.013) (0.018) (0.021) (0.015) (0.018) Change n black share of populaton *** *** *** *** ** ** (0.022) (0.025) (0.017) (0.015) (0.015) (0.014) Change n foregn born share ** * ** ** (0.009) (0.011) (0.017) (0.019) (0.013) (0.012) 1950 CC area 0.065*** 0.081*** 0.056** 0.063*** 0.051* *** (0.017) (0.018) (0.022) (0.018) (0.027) (0.020) Change n medan famly ncome ** *** (0.146) (0.155) (0.156) (0.142) (0.089) (0.077) Change n medan gross rent * (0.118) (0.123) (0.103) (0.102) (0.108) (0.095) Change n percent manufacturng employment (0.094) (0.075) (0.058) (0.051) (0.043) (0.039) Change n percent agrculture employment * ** (0.031) (0.028) (0.029) (0.031) (0.036) (0.043) Reject null of no endogenety at 5% level Yes Yes Yes Yes Yes Yes Frst stage F-stat R N Census dvson fxed effects Yes Yes Yes Yes Yes Yes Table , , and long dfference regressons

9 Revew of Appled Soco- Economc Research (Volume 9, Issue 1/ 2015), pp. 33 e-mal: * p<0.10, ** p<0.05, *** p<0.01 Table 3. Average change n resdental segregaton: actual versus predcted (1) (2) (3) (4) (5) (6) Actual Predcted Actual Predcted Actual Predcted Average change n dssmlarty ndex Predcted average change n dssmlarty ndex s obtaned by estmatng the long dfference regressons assumng no suburbanzaton. Table 3 presents the actual and the predcted changes n racal resdental segregaton for , , and long run changes. The fgures n columns 1, 3, and 5 are the actual changes n the dssmlarty ndex as observed n the data. Columns 2, 4, and 6 show the changes n the dssmlarty ndex as predcted by the long dfference model, assumng the rate of suburbanzaton to be zero for all the ctes n the sample. Table 3 shows that on average, the declne n resdental segregaton would have been greater had there been no suburbanzaton. For long run change, the average declne n dssmlarty ndex would have been 3.6 percentage ponts more n absence of suburbanzaton. For and , t s by 5.2 and 3.8 percentage ponts respectvely. Thus between 1960 and 2000, suburbanzaton has weakened the declne n racal resdental segregaton on average n US metropoltan areas. Panel Regresson Results Table 4 presents the results from panel regressons for decennal years from 1960 to 2000 as specfed n equaton (3). The frst two columns n Table 4 nclude the demographc varables, regonal dummes and year dummes (not shown n the table) as controls n addton to the central cty populaton varable. The last two columns report OLS and IV regressons addng further controls. Central cty populaton s negatvely assocated wth racal resdental segregaton and s statstcally sgnfcant for all the specfcatons. For OLS(3), one standard devaton declne n the share of central cty populaton s assocated wth a 8 percentage ponts rse n resdental segregaton. For the panel IV regressons, the nstrument s measured as the number of nterstate hghways n the 1947 hghway plan tmes the fracton of hghway mleage runnng through the central cty of MSA n year t-1. The nstrument performs well n predctng central cty populaton wth F-statstcs rangng from to 17.96

10 Revew of Appled Soco- Economc Research (Volume 9, Issue 1/ 2015), pp. 34 e-mal: Table 4. Panel OLS and IV regressons wth share of central cty populaton as the dependent varable OLS1 IV1 OLS2 IV2 OLS3 IV3 Share of CC populaton ** * ** * * * (0.0341) (0.0620) (0.0428) (0.0592) (0.0443) (0.0522) Log MSA populaton ** ** ** (0.0511) (0.0587) (0.0552) (0.0591) (0.0682) (0.0478) Log populaton densty *** (0.0179) (0.0146) (0.0172) (0.0121) (0.0163) (0.0109) Log black share * * (0.0227) (0.0250) (0.0222) (0.0269) (0.0215) (0.0118) Log foregn born share * ** (0.0125) ( ) (0.0124) ( ) (0.0196) ( ) Log medan ncome * (0.0644) (0.0412) (0.0546) (0.0254) Log medan rent *** (0.105) (0.0614) (0.0922) (0.0451) Share of manufacturng employment (0.0594) (0.0384) (0.0584) (0.0330) Share of agrculture employment (0.191) (0.217) (0.186) (0.190) Endogenety Yes Yes Yes Frst stage F-stat R N Controls not shown: Year dummes. Regonal Dummes, regonal dummes and suburbanzaton nteracton * p<0.10, ** p<0.05, *** p<0.01 Causal estmates of the central cty populaton varable have the expected negatve sgn and are statstcally sgnfcant at conventonal levels for all the three specfcatons. For the baselne specfcaton (IV1), a one standard devaton declne n the share of central cty populaton causes metropoltan area resdental segregaton to rse by 11 percentage ponts. Agan, regressons ncludng manufacturng and agrcultural employment as addtonal controls produce qualtatvely smlar coeffcent estmates of the central cty populaton varable, confrmng that the estmates are not pckng up any correlaton between the

11 Revew of Appled Soco- Economc Research (Volume 9, Issue 1/ 2015), pp. 35 e-mal: 1947 hghway plan and future employment growth. As t can be seen from regresson IV3, a one standard devaton declne n the share of central cty populaton causes metropoltan area resdental segregaton to rse by 10 percentage ponts. Thus suburbanzaton over tme has led the metropoltan areas to be more resdentally segregated. Among the other varables, dssmlarty ndex s strongly negatvely assocated wth MSA populaton. If dfferences n ncome across race contrbute to racal resdental segregaton, then ths segregaton may fall because of an ncrease n MSA populaton f a sgnfcant porton of ths populaton ncrease s better educated and hgher ncome blacks. Medan sngle famly gross rent and medan ncome s postvely related to segregaton. Hgher rental prces may be a result of housng supply constrant due to varous resdental land regulatons. As Rothwell (2009) fnds, restrctve measures such as maxmum densty zonng have a strong negatve effect on metropoltan housng growth. Regulatory regmes lke ths lmt the supply of new housng and facltate constructon toward larger and more expensve homes naccessble to mnortes, thereby causng racal resdental segregaton (Massey and Rothwell 2009). The absolute magntudes of the OLS estmates for the central cty populaton varable are always smaller than that of the IV estmates for both the long dfference and panel regressons. Ths mght happen due to the measurement errors arsng from ncorrectly measurng the suburbanzaton and resdental segregaton varables. The process of suburbanzaton may be more relevant to a partcular secton of the central cty. In that case, the effect of suburbanzaton on racal resdental segregaton would be better captured by measurng suburbanzaton and segregaton at smaller neghborhood levels nstead of the entre central cty. 6. Concluson Ths paper tests the hypothess that populaton movement from the central ctes of MSAs n the Unted States between 1960 and 2000 have caused the MSAs to be more resdentally segregated. Ths process of suburbanzaton conssted of mostly the nonblacks, who moved to the suburbs, and the central ctes remaned predomnantly nhabted by the blacks. Ths populaton movement thus resulted n greater blacknonblack resdental segregaton. Prevous research vewed suburbanzaton as one of the factors that explan the observed segregated resdental pattern n the Unted States. Ths paper contrbutes to the exstng lterature by dentfyng the drecton of causalty between suburbanzaton and racal resdental segregaton. Usng the 1947 natonal hghway plan as an nstrument for suburbanzaton and decennal census data from 1960 to 2000 n long dfference and panel settngs, ths paper fnds sgnfcant evdence that central cty depopulaton n fact caused metropoltan areas to be more resdentally segregated. Estmaton results from the , long dfference regressons and panel regressons yeld sgnfcant negatve coeffcents for the suburbanzaton varable. A one standard devaton more declne n the central cty populaton from 1960 to 2000 lessens the declne n dssmlarty ndex by 4 percentage ponts. Ths paper fnds that suburbanzaton has decelerated the fall n racal resdental segregaton on average n US metropoltan areas between 1960 and Had there been no suburbanzaton, black-nonblack resdental segregaton on average would have declned by.231 ponts, whch s about 4 percentage ponts more than what s observed n the data. 7. References [1] Baum-Snow, N., Dd Hghways Cause Suburbanzaton, Quarterly Journal of Economcs, 2007, 122(2), [2] Boustan, L. P., Was Postwar Suburbanzaton Whte Flght? Evdence from the Black Mgraton, Quarterly Journal of Economcs, 2010, 125(1),

12 Revew of Appled Soco- Economc Research (Volume 9, Issue 1/ 2015), pp. 36 e-mal: [3] Cutler, D. M. and Glaeser, E. L., Are Ghettos Good or Bad, Quarterly Journal of Economcs, 1997, 112(3), [4] Cutler, D. M., Glaeser, E. L. and Vgdor, J. L., The Rse and Declne of Amercan Ghetto, Journal of Poltcal Economy, 1999, 107(3), [5] Duncan, D. O. and Duncan, B., A Methodologcal Analyss of Segregaton Indexes, Amercan Socologcal Revew, 1955, 20, [6] Gardner, J. and Cohen W. Demographc Characterstcs of the Populaton of the Unted States, : County- Level, ICPSR00020-v1. Ann Arbor, MI: Inter-unversty Consortum for Poltcal and Socal Research [dstrbutor], 1992, do: /icpsr00020.v1. [7] Iceland, J., Wenberg D. H. and Stenmetz E., Racal and Ethnc Resdental Segregaton n the Unted States: , US Census Bureau, Census Specal Report, CENSR, [8] Jackson, K. T. (1985), Crabgrass Fronter: The Suburbanzaton of the Unted States, Oxford UK: Oxford Unversty Press [9] Massey, D. S. and Denton N., Trends n the Resdental Segregaton of Blacks, Hspancs, and Asans: , Amercan Socologcal Revew, 1987, 52, [10] Massey, D. S. and Denton N., Suburbanzaton and Segregaton n US Metropoltan area, The Amercan Journal of Socology, 1988a, 94(3), [11] Massey, D. S. and Denton N., The Dmensons of Resdental Segregaton, Socal Forces, 1988b, 67(2), [12] Massey, D. S. and Rothwell J., The Effect of Densty Zonng on Racal Segregaton n US Urban areas, Urban Affars Revew, 2009, 44(6), [13] Meszkowsk, P. and Mlls E.S., The Causes of Metropoltan Suburbanzaton, Journal of Economc Perspectves, 1993, 7(3), [14] Rothwell, J. T., The Effects of Densty Regulaton on Metropoltan Housng Markets, Avalable at SSRN, 2009: or [15] Schellng, T. C., Dynamc Models of Segregaton, Journal of Mathematcal Socology, 1971, 1, [16] Tebout, C. M., A Pure Theory of Local Expendtures, Journal of Poltcal Economy, 1956, 64(5), [17] Wlson, W.J. (1987), The truly dsadvantaged: The nner cty, the underclass, and publc polcy, Chcago: Unversty of Chcago Press.