Neighborhood and Life Chances: How Place Matters in Modern America

Chapter 14. Are Mixed Neighborhoods Always Unstable? Two-Sided and One-Sided Tipping

C h a p t e r 1 4 Are Mixed Neighborhoods Always Unstable? Two-Sided and One-Sided Tipping David Card, Alexandre Mas, and Jesse Rothstein Racial segregation is a defining feature of urban neighborhoods in the United States. A large body of social science research has established that black children raised in more segregated areas have worse outcomes , including lower levels of completed education, lower test scores, lower marriage rates, lower employment and earnings, and higher crime rates (e.g., Massey and Denton 1993; Cutler and Glaeser 1997). Though researchers still do not agree about the extent to which the observed correlations between segregation and these outcomes are causal, a major goal of public policy over the past four decades has been to reduce racial segregation in neighborhoods, schools, and workplaces. The efficacy of integration policies depends critically on the underlying forces that have led to and sustained segregation. While institutional and legal forces played an important part in enforcing segregation in the Jim Crow era, many analysts have argued that the preferences of white families for neighborhoods with a lower fraction of minority residents are the driving force in explaining segregation today (e.g., Cutler and Glaeser 1997). In a highly influential contribution, Schelling (1971) showed that even when most whites have relatively weak preferences for lower minority shares, social interactions in preferences are likely to lead to a fully segregated equilibrium. In Schelling’s model (and in more recent theoretical studies, including Brock and Durlauf 2001 and Glaeser and Scheinkman 2003), a given neighborhood can have multiple equilibria. Holding constant conditions in the rest of the city, the neighborhood could either be (nearly) 100 percent white, nearly 100 percent minority, or a mixture. Importantly, however, in Schelling’s formulation the mixed equilibrium is inherently unstable: adding a few extra minority families sets off a chain of departures by whites that only 238 Segregation −60 −40 −20 0 20 Change in non−Hispanic white population, 1970−1980 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100 Percent minority (Hispanic or non−white) in tract in 1970 Figure 14.1. Neighborhood Change in Chicago, 1970–1980 ends once all the white families have left. Likewise, adding a few white families sets off a chain of departures by minority families that ultimately lead to an all-white neighborhood. In this chapter we use data on the evolution of census tracts from 1970 until 2000 to investigate whether integrated neighborhoods are sustainable in the long run, or whether they are inherently unstable and destined to become either 100 percent minority or 100 percent white. Our analysis builds on a companion paper (Card, Mas, and Rothstein 2008b; hereafter CMR), in which we found that most major metropolitan areas are characterized by a city-specific ‘‘tipping point,’’ a level of the minority share in a neighborhood that once exceeded sets off a rapid exodus of the white population. To illustrate this finding, Figure 14.1 plots mean percentage changes in the white population of Chicago census tracts from 1970 to 1980 against the tract’s minority share in 1970.1 The graph shows clear evidence of a critical threshold at around a 5 percent minority share: neighborhoods with 1970 minority shares below this threshold experienced gains in their white populations over the next decade, while those with initial shares above the threshold Are Mixed Neighborhoods Always Unstable? 239 experienced substantial outflows. These patterns hold on average for a broad sample of U.S. cities in each of the past three decades. Most common understandings of neighborhood tipping envision a transition from virtually all-white composition to virtually 100 percent minority. This is certainly the historical experience. Northern cities had relatively low numbers of racial minorities in 1940, but as African Americans migrated from the South, many neighborhoods within these cities tipped from all-white to nearly all-black. This process has been interpreted by many analysts as evidence of the inherent instability in integrated neighborhoods predicted by Schelling’s model. According to this interpretation , the mixed neighborhoods observed today (say with a 10 or 15% minority share) are in the process of transitioning to an all-minority status. Nevertheless, a class of alternative models—including the one developed in CMR—suggests that mixed neighborhoods can survive in the long run, so long as...