Study: Racial Differences in Education, Employment Have Strongest Impact on Black-White Income Inequality

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Research News

NLC is looking at recent research and studies related to inequalities and racial and economic disparities with the aim of making the findings and recommendations more accessible to NLC member cities. The information here may be useful in developing local programs and policies related to these issues.

In their paper "Black-White Income Inequality and Metropolitan Socioeconomic Structure" (Journal of Urban Affairs, Volume 25, Number 3, 2003) Charles Jaret, Lesley Williams Reid and Robert Adelman examine the impact of various factors on black-white income inequality.

Using 1990 Census data and a sample of 112 metropolitan areas, the authors focus on three broad areas of research related to black-white income inequality--spatial, economic and demographic--and discuss and integrate the research literature on metropolitan interracial inequality.

Their key findings were as follows:

* Severe income inequality between blacks and whites exists in most metropolitan areas, with black per capita income being 55 percent of white per capita income, on average.

* Racial educational inequality and unemployment differences were the strongest predictors of racially based income inequality.

* Metropolitan areas that are highly ranked on a business and financial dominance hierarchy have the most interracial income inequality.

* When a metropolitan area has a high level of manufacturing employment vis-a-vis low service employment it has less income inequality.

Based on their analyses of existing research the authors begin with the following hypotheses:

* Metropolitan areas with higher racial residential segregation will have more black-white income inequality.

* Metropolitan areas exhibiting more suburban sprawl will have higher levels of black-white income inequality than those with less suburban expansion.

* The lower a metropolitan area's ratio of manufacturing jobs to low-wage service jobs, the greater its level of black-white income inequality.

* The higher a metropolitan area ranks on the business and financial hierarchy, the greater the level of black-white income inequality.

* A weak relationship between immigration and black-white income inequality exists, with higher immigration being linked to more income inequality.

* The percentage of blacks in a metropolitan area is positively related to black-white income inequality.

The authors found that, outside of the effects of unemployment, education, industrial structure and region, neither immigration nor sprawl showed significant effects on income inequality.

Immigration seemed to have a modest rather than a severe negative effect on interracial income inequality. And other political and economic factors related to the urban growth process, rather than sprawl itself, contributed to higher concentrations of black poverty which contribute to Wider back-white income differences. …