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Cited by 68Urban, Neighborhood, and Segregation StudiesIntergenerational and Educational Inequality StudiesIncome, Poverty, and Inequality

The End of the American Dream? Inequality and Segregation in US Cities

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Fogli, Alessandra, Guerrieri, Veronica·2019·National Bureau of Economic Research
DOI 10.3386/w26143
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Abstract

Since the '80s the US has experienced not only a steady increase in income inequality, but also a contemporaneous increase in residential segregation by income.Using US Census data, we first document a positive correlation between inequality and segregation at the MSA level between 1980 and 2010.We then develop a general equilibrium overlapping generations model where parents choose the neighborhood where to raise their children and invest in their children's education.In the model, segregation and inequality amplify each other because of a local spillover that affects the returns to education.We calibrate the model using 1980 US data and the micro estimates of the effect of neighborhood exposure in Chetty and Hendren (2018).We then assume that in 1980 an unexpected permanent skill premium shock hits the economy and show that segregation contributes to 28% of the subsequent increase in inequality.

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  • As a result, educational inequality increases, in turn further widening economic inequality.

    “As a result, educational inequality increases, in turn further widening economic inequality.”

    From Educational Inequality* (2022) · cites this paper as Fogli and Guerrieri (2019)

  • Rising economic inequality leads to more residential segregation, as richer parents seek out homogeneous neighborhoods with strong peer effects.

    “Rising economic inequality leads to more residential segregation, as richer parents seek out homogeneous neighborhoods with strong peer effects.”

    From Educational Inequality* (2022) · cites this paper as Fogli and Guerrieri (2019)

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Authors
Fogli, A., & Guerrieri, V.
Affiliations
National Bureau of Economic Research (US)
Venue
National Bureau of Economic Research
Publisher
National Bureau of Economic Research
Published
2019-08
DOI
10.3386/w26143
OpenAlex
W2803011764
Cited by
68
References
64
Citations by year
2026: 3 · 2025: 8 · 2024: 9 · 2023: 14 · 2022: 13 · 2021: 9 · 2020: 6 · 2019: 3 · 2018: 1 · 2017: 1
Type
report
Language
en
Open access
Locations
  • National Bureau of Economic Research (publishedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
Topics
  • Social Sciences › Sociology and Political Science › Urban, Neighborhood, and Segregation Studies
  • Social Sciences › Sociology and Political Science › Intergenerational and Educational Inequality Studies
  • Social Sciences › Sociology and Political Science › Income, Poverty, and Inequality
Keywords
income inequality, neighborhood effects, returns to education, overlapping generations model, neighborhood selection, education investment, metropolitan areas, American Dream

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