Working Paper: NBER ID: w24826
Authors: Peter Christensen; Christopher Timmins
Abstract: Growing evidence indicates that neighborhoods affect human capital accumulation, raising concern that the exclusionary effects of housing discrimination could contribute to persistent inequality. Using data from HUD's most recent Housing Discrimination Study and micro-level data on key attributes of neighborhoods in 28 US cities, we find strong evidence that discrimination constrains the neighborhood choices of minorities in a housing search. Minority testers are significantly more likely to be steered towards neighborhoods with lower quality schools and neighborhood human capital, and higher rates of assault and pollution exposure. Holding location preferences and income constant, discriminatory steering alone can explain a disproportionate number of minority households found in high poverty neighborhoods in the United States and could contribute to racial gaps in inter- generational income mobility. These results have important implications for the analysis of neighborhood effects and further establish discrimination as a mechanism underlying observed correlations between race and pollution exposures.
Keywords: Housing Discrimination; Neighborhood Choice; Economic Mobility; Intergenerational Income Mobility
JEL Codes: Q51; Q53; R31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Discriminatory steering (J71) | Constrains neighborhood choices of minority households (R20) |
| Constrains neighborhood choices of minority households (R20) | Recommended homes in neighborhoods with lower quality schools and higher poverty rates (R28) |
| Discriminatory steering (J71) | Higher pollution exposure and crime rates for minority testers (J15) |
| Systematic differences in homes shown to minority testers (R28) | Racial gaps in intergenerational income mobility (J62) |
| Discriminatory steering (J71) | Long-term outcomes related to education and economic mobility for minority families (I24) |