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"Double Disadvantage: Rising Income Segregation in Children’s Neighborhoods and Schools,"

by Ann Owens July-September 2016 issue of Poverty & Race

Where a child grows up and where she goes to school are critical in predicting her future success. Over the past several decades, poor and rich children increasingly grow up in separate neighborhoods and attend separate schools—segregation by income between neighborhoods, schools, and school districts increased from 1990 to 2010. These trends are related to one another. Where a child lives often determines, or at least influences, where she goes to school, so segregated schools reflect segregated neighborhoods. But available school options shape where parents choose to live. Inequality in school test scores, spending, or racial/ethnic and socioeconomic composition affect which schools parents see as desirable, and parents take school district boundaries and school attendance boundaries into account when deciding where to live. Neighborhood and school segregation are thus a reinforcing cycle. The increasing divide in the contexts that poor and rich children experience may have serious consequences for future inequality and social mobility. Policy solutions aimed at providing equal opportunity for all children must therefore address both neighborhoods and schools and their relationship with one another to address this consequential issue.

Income Segregation between Neighborhoods

Past research indicated that income segregation between neighborhoods increased since 1970 (Reardon and Bischoff 2011; Bischoff and Reardon 2014). However, my analysis of Census data since 1990 shows that this is only true among families with children (Owens 2016). Among childless households, income segregation has been stable, while it increased by over 20% among families with kids from 1990 to 2010 in large metropolitan areas. In addition, income segregation between families with children was nearly twice as high among families with kids as among childless households in 2010.

Income segregation can be measured in several different ways, but it generally captures the degree to which households of different incomes live in separate neighborhoods. I use a measure that compares the income distribution in a neighborhood—how many high-, middle-, and low-income households live there—to the income distribution in the neighborhood’s metropolitan area. If there were no segregation, the distributions should be the same—the same proportion of high-, middle-, and low-income families would be found in every neighborhood. When segregation is higher, it means that there are more neighborhoods predominantly made up of low- or high-income households and fewer mixed-income neighborhoods.

Because segregation is higher among families with children than childless households, poor kids are exposed to more poor neighbors than poor adults are (and rich kids are exposed to more rich neighbors than rich adults are). For example, in 2010, children from families with incomes in the highest 20% of the U.S. income distribution lived in neighborhoods where over 40% of their neighbors also had household income in the top quintile. In contrast, childless households with incomes in the top quintile lived in neighborhoods where fewer—about 35%—of their neighbors were high-income. Children experience more segregated contexts than adults.

Income segregation can occur at any point in the income distribution. For example, average income segregation might be high if the poor live in different neighborhoods than middle-income households or the rich live away from poor households, or a variety of other scenarios. My analysis of changes from 1990 to 2010 indicates that income segregation is highest for the rich—high-income households live with other high-income families in the most segregated neighborhoods. Income segregation increased at nearly every point in the income distribution during the 2000s. Its rise has not been driven solely by a concentration of poverty, though the poor have become more segregated from higher-income families.

The Role of Parents’ Resources and Schooling Concerns

Why is income segregation higher—and rising—among families with children? I identified two factors that play key roles. First, parents’ economic resources contribute to income segregation between neighborhoods. Income inequality has risen for the last 40 years, meaning that rich families have become even richer—they are pulling away from middle class and poor families in terms of their income. One thing people do with extra income is spend it on living in their ideal neighborhood, often a neighborhood that is unaffordable to lower-income households. I find that the relationship between rising income inequality and rising income segregation is twice as strong among families with children as among childless households. Compared to the general population, parents in particular convert extra economic resources into residence in exclusive neighborhoods, leading to residential income segregation. Though income inequality has also risen among childless households (though to a lesser degree than among families with children), its relationship with income segregation is weaker. High-income childless families may spend extra money on different priorities than housing, or if they do spend extra resources on housing, they may choose to live in more integrated areas.

The second key factor contributing to residential income segregation among families with children is concerns about school options. My study shows that in places where parents have more choice among school districts, segregation is higher. When parents have more choice, they can select their ideal district, within their budgetary constraints. This leads to greater separation between high- and low-income families with children as high-income parents spend money to live in neighborhoods within particular school district boundaries. For example, in 2010, income segregation between neighborhoods was extremely high in the Newark, NJ, metropolitan area, where there are over 140 school districts. Income segregation between neighborhoods was more than 50% lower in the McAllen, TX, metropolitan area, where there are 17 school districts. (My measure of school district options accounts for the total number of students in the metropolitan area, capturing the degree to which metropolitan areas are carved into different districts regardless of how many students they serve.) Childless households are likely less concerned about school district boundaries (though this population does include empty nesters and young couples who will have children), and their segregation is therefore lower than families with children.

Income Segregation between Schools and School Districts

Like income segregation between neighborhoods, income segregation between school districts and between schools has also increased over the past several decades (Owens, Reardon, and Jencks 2016). In analyses of national data from the National Center for Education Statistics, my colleagues and I found that from 1990 to 2010, income segregation between school districts among public school families grew by over 15% in large metropolitan areas. From 1991 to 2012, income segregation of students between schools increased by over 40% in large public school districts. In particular, segregation between schools rose substantially—by over 20%—just from 2008 to 2012. This startling uptick may be driven by the Great Recession, as more families became poor and many lost their homes, perhaps forcing them to move to poorer districts, leading to concentration of poverty. Whether income segregation between schools continues to rise at such a striking rate remains to be seen.

Rising income segregation between schools and between school districts means that schools and school districts are less economically diverse than they were 25 years ago. Poor children enroll in districts and schools with more poor children, and rich children attend schools and districts that enroll more rich children. In 2012 in the 100 largest school districts, a student eligible for free lunch attended a school where, on average, 60% of his schoolmates are also eligible for free lunch.

As is the case for segregation between neighborhoods, rising income inequality has also contributed to the increase in income segregation between schools and between districts. Over the past several decades, rising income inequality has resulted in parents increasing the amount of money they spend on their children, with a growing gap in spending between high- and low-income parents (Kornrich and Furstenberg 2013). Buying or renting a home in a particular neighborhood so that their child can attend a particular school or so that they live within certain district boundaries is another way parents spend money on their children. High-income parents have an increasing resource advantage over low-income parents, given the rise in income inequality, enabling them to afford residence in areas unaffordable to low-income families. The rise of income segregation, due in part to rising income inequality, has created more economically homogenous neighborhoods, schools, and school districts over the past 25 years.

Consequences of Income Segregation for Children’s Well-being

What are the consequences of rising income segregation in children’s contexts? Social science research on both neighborhood and school contexts overwhelmingly suggests that economically homogenous neighborhoods, schools, and districts will contribute to inequality in children’s adult outcomes. Research has shown that growing up in poor neighborhoods reduces children’s educational attainment, employment prospects, wages, and health and may increase the odds of teen pregnancy (Chetty, Hendren, and Katz 2016; Sharkey and Faber 2014). Research also shows that attending school with low-income peers is detrimental for poor students’ educational outcomes (Schwartz 2012). Racial segregation between schools and neighborhoods remains a serious social problem, but recent research indicates that racial segregation between schools is detrimental for minority students’ outcomes largely because of its link with poverty: racial segregation also concentrates poverty in certain schools, and the concentration of poverty reduces children’s achievement (Reardon 2016). Further, because local school funding remains linked to household income and property taxes in the district, income segregation between school districts may contribute to inequality in school funding between high- and low-income children’s school contexts. Therefore, economic segregation between children’s neighborhoods, schools, and school districts may reduce the achievement and future well-being of low-income children, leading to growing economic inequality in the future and reducing the likelihood that low-income children can pull themselves out of poverty.

Policy Implications

What should be done? This issue can be approached from several angles. First, we can tackle income inequality, a key engine of income segregation across these various contexts, with policies aimed at increasing the incomes of low- and middle-income families relative to high-income families. Second, mixed-income neighborhoods can be created by building more affordable housing in high- and mixed-income areas and protecting low-income areas from gentrifying into exclusive enclaves. This will reduce income segregation and provide low-income families and their children access to better opportunities in their neighborhood and schools.

Third, educational policies can be adopted to promote income mixing between schools and, more importantly, between school districts, where most of the inequality lies. Schools can be homogenously low-income because their entire district is low-income and/or because there is segregation between schools within the same district. My research indicates that over 60% of income segregation between schools is due to income segregation between districts. Therefore, student assignment policies that operate within districts, moving students from one school to another, will have limited impact. Cross-district programs are therefore necessary. One potentially promising model for inter-district income integration may be magnet schools that draw higher-income students into city districts from suburban communities, as in Hartford, CT. Until neighborhood income segregation is reduced, other methods of breaking the link between neighborhood residence and school enrollment are necessary. Moreover, such policies may themselves reduce income segregation between neighborhoods, since parents take school attendance and district boundaries into account when choosing where to live. If the neighborhood-school link is weakened, segregation in both contexts may decline.

On July 12, 2016, Senator Chris Murphy and Congresswoman Marcia L. Fudge introduced the Stronger Together School Diversity Act of 2016 to promote economic diversity in schools, building on President Obama’s FY 2017 Stronger Together budget proposal. This legislation authorizes $120 million in funding to support districts as they develop and expand strategies to increase diversity, particularly socioeconomic diversity, in schools. This bill may lead to promising programs that can be scaled up across communities.

These are all fiercely contested policy arenas with many competing proposals and stakeholders. Before we decide what should be done, we need to agree that something should be done at all. High-income parents should not be blamed for taking advantage of the opportunities available to them and their children, but we need to acknowledge the inequalities that arise when not everyone has access to the same opportunities.

Some may see these inequalities as a natural or inevitable outcome of some combination of meritocracy, capitalism, and individual responsibility. But a core tenet of American society, and the American education system in particular, is equal opportunity: where you’re born and who your parents are should not determine where you end up. Study after study shows that this American Dream is seriously endangered, if it ever existed at all. Until we start thinking about providing opportunities for all children, not just our own, social inequality in America will remain a costly problem.

References: Income Segregation

Bischoff, Kendra, and Sean F. Reardon. 2014. “Residential Segregation by Income, 1970-2009.” In Diversity and Disparities, edited by John R. Logan, 208–33. New York, NY: Russell Sage Foundation.

Chetty, Raj, Nathaniel Hendren, and Lawrence F. Katz. 2016. “The Effects of Exposure to Better Neighborhoods on Children: New Evidence from the Moving to Opportunity Project.” American Economic Review 106 (4): 855–902.

Kornrich, Sabino, and Frank Furstenberg. 2013. “Investing in Children: Changes in Parental Spending on Children, 1972-2007.” Demography 50 (1): 1–23.

Owens, Ann. 2016. “Inequality in Children’s Contexts: The Economic Segregation of Households with and Without Children.” American Sociological Review 81 (3): 549–74.

Owens, Ann, Sean F. Reardon, and Christopher Jencks. 2016. “Income Segregation between Schools and School Districts.” American Educational Research Journal 53 (4): 1159-1197.

Reardon, Sean F. 2016. School Segregation and Racial Academic Achievement Gaps. CEPA Working Paper. Palo Alto, CA: Stanford Center for Education Policy Analysis.

Reardon, Sean F., and Kendra Bischoff. 2011. “Income Inequality and Income Segregation.” American Journal of Sociology 116 (4): 1092–1153.
Schwartz, Heather. 2012. “Housing Policy Is School Policy: Economically Integrative Housing Promotes Academic Success in Montgomery County, Maryland.” In The Future of School Integration, edited by Richard D. Kahlenberg, 27–65. New York, NY: The Century Foundation.

Sharkey, Patrick, and Jacob W. Faber. 2014. “Where, When, Why, and for Whom Do Residential Contexts Matter? Moving Away from the Dichotomous Understanding of Neighborhood Effects.” Annual Review of Sociology 40: 559–79.

Ann Owens is Assistant Professor in the Department of Sociology, University of Southern California.

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