TAKE THE MONEY AND RUN - ECONOMIC SEGREGATION IN US METROPOLITAN-AREAS

Compared to residential segregation by race, economic segregation has received relatively little attention in recent empirical literature. Y et a heated debate has arisen concerning Wilson's (1987) hypothesis th at increasing economic segregation among African Americans plays a rol e in the formation of urban ghettos. I present a methodological critiq ue of the measure of economic segregation used by Massey and Eggers (1 990) and argue that their measure confounds changes in the income dist ribution with spatial changes. I develop a ''pure'' measure of economi c segregation based on the correlation ratio and present findings for all U.S. metropolitan areas from 1970 to 1990. Economic segregation in creased steadily for Whites, Blacks, and Hispanics in the 1970s and 19 80s, but. the increases have been particularly large and widespread fo r Blacks and Hispanics in the 1980s. I explore the causes of these cha nges in a reduced-form, fixed-effects model. Social distance and struc tural economic transformations affect economic segregation, bur the la rge increases in economic segregation among minorities in the 1980s ca nnot be explained by the model. These rapid increases in economic segr egation, especially in the context of recent, albeit small, declines i n racial segregation, have important implications for urban policy, po verty policy, and the stability of urban communities.