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Welcome Neighbors? New evidence on the possibility of stable racial integration

Welcome Neighbors? New evidence on the possibility of stable racial integration. by Ingrid Gould Ellen THE BROOKINGS REVIEW Winter 1997 Vol.15 No.1 pp. 18-21. Conventional Wisdom.

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Welcome Neighbors? New evidence on the possibility of stable racial integration

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  1. Welcome Neighbors? New evidence on the possibility of stable racial integration by Ingrid Gould Ellen THE BROOKINGS REVIEW Winter 1997 Vol.15 No.1 pp. 18-21

  2. Conventional Wisdom The conventional wisdom on racial integration in the United States is that there are three kinds of neighborhoods: the all-white neighborhood, the all-black neighborhood, and the exceedingly rare, highly unstable, racially mixed neighborhood. The only real disagreement is about why so few neighborhoods are successfully integrated. Some attribute it to white discrimination pure and simple: whites, that is, have consciously and determinedly excluded blacks from their communities. Others contend that it is a matter of minority choice. Like Norwegians in Brooklyn's Bay Ridge and Italians in Manhattan's Little Italy, African Americans, they explain, prefer to live among their own kind. Finally, others maintain that segregation is driven mainly by income differences across racial groups. But almost all agree that when African Americans do manage to gain a foothold in a previously all-white community, the whites move away in droves—a phenomenon well known as "white flight." Integration is no more than, in the words of Saul Alinsky, the "time between when the first black moves in and last white moves out."

  3. Stable Neighborhoods? • Why do some mixed neighborhoods remain integrated? • Finds that current degree of integration has little impact on future racial mix. • Equality of socioeconomic status (between B and W) seems not to have much impact. • Instability may be caused by concerns about future, rather than current concerns.

  4. Three Hypotheses 1. Those who are less invested in structural strength of community may be more open to racial mixing, more likely to live in mixed neighborhoods. These are renters, people w/o children. 2. Racial concerns may be more important to those about to move in, than to those thinking about moving out. 3. Racial mixing should be more stable in communities that seem “sheltered” in some way from quick racial change.

  5. Policy Implications • Don’t need quotas, since change is not related to specific levels of racial %. • “Sign bans” for example, are poorly targeted. Integration would be more effectively promoted by encouraging outsiders to move in, not discouraging insiders from leaving.

  6. Economic Growth • A lot of policy work looks at urban economic growth  • JOBS • Let’s take a closer look.

  7. Multipliers • Key aspect is the idea of goods that are exported. • Suppose we start to sell $100,000 per year more in cars. If 60% of increased income is spent on local goods, local consumption increases by $60,000, which is income next year.

  8. Multipliers • EXCEL Program (OS_ch6) shows what happens. D(Inc) = DX + mDX + m2DX + … + mnDX (1) mD(Inc) = mDX + m2DX + m3DX + … + mn+1DX (2) Subtract (1) - (2) D(Inc) - mD(Inc) = DX - mn+1DX D(Inc) (1 - m) = DX (1 - mn+1) As n gets large, mn+1 goes to 0. D(Inc) = DX/(1 - m). It’s like macroeconomic multipliers.

  9. Multipliers • We see this stuff all the time. They call it IMPACT analysis. • Problems. • Assumes that you have a bunch of unemployed resources sitting around who would never work otherwise. • Assumes Sales/Job ratio is constant. • Typically assumes that LARGE amounts of dollars are re-spent locally.

  10. Labor Market Effects Wage • Increased sales increase the demand for labor. • Slope of labor demand curve • Related to factor substitutability. Higher wages lead us to substitute other factors. • Related to output effects. Higher wages lead to higher prices, leading consumers to substitute other goods. Slope of line Demand ↑ Labor

  11. Labor Market Effects • What shifts labor demand curves? • Demand for exports • Labor productivity • Business taxes (increase production costs and price, decreasing demand for labor) • Public services (may make labor more productive).

  12. Supply of Labor • Wage increases make the city more attractive. People move in from elsewhere. • Shifts to left or right: • Environmental quality improves. City is better place to live. People move in at any wage. • Residential taxes. Shift supply to the left, at any wage. • Residential services. Shift supply to the right.

  13. Supply/Demand Direct Inc. D • Start with Demand at D. • We have a direct ↑ with exports. • Then an indirect ↑. Direct + Ind. Inc. Wage Laborers

  14. Supply makes a difference Sshortrun D’ D • In the short run, Supply may be pretty inelastic. • Wages may rise. • Question about how mobile labor is. W2 Slongrun Wage W3 W1 Laborers

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