Governance and Opportunity in Metropolitan America (1999) / Chapter Skim
Currently Skimming:
3 Disparities in Outcomes
3 Disparities in Outcomes
Pages 40-78
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From page 40... ...
; labor market disparities (employment and unemployment rates for working-age men) ; and educational disparities (high school and college completion rates)
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From page 41... ...
With the TABLE 3-1 Comparison of Selected Outcomes for Central-City and Suburban Residents, 1990 Ratio of Central-City Outcome Central City Non-Central City to Suburban Outcome Median household income $26,727 $36,314 .74 Per capita income $13,839 $16,527 .84 Poverty rate, families 14.1% 6.0% 2.35 Employed men ages 25 54a 83.3% 90.0% .93 Unemployment rate, men ages 25-54 6.8% 4.0% 1.7 High school graduates, men ages 25-34 80.7% 85.8% .94 aMembers of the armed forces are counted as employed. Source: U.S.
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From page 42... ...
Relative to their suburban counterparts, central-city residents now have lower incomes, higher poverty rates, and lower employment rates than they did 10, 20, and 30 years ago.i The income differences are particularly stark. In 1960, the income of central-city families was 89 percent of that of suburban families.
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Nationwide, the poverty rate is 8 percent in the suburbs and 18 percent in central cities. But approximately 10 percent of suburban census tracts had poverty rates of at least 18 percent.
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In 1990, central cities were actually as prosperous or more so than their surrounding suburban communities in 101 (31 percent) of metropolitan areas (see also Hill and Wolman, 1997a)
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From page 45... ...
Paul, MN .26 .85 .92 .97 Philadelphia, PA .326 .63 .83 .86 Dallas, TX .394 .96 .92 .89 Los Angeles-Long Beach, CA .442 .998 .96 .93 San Diego, CA .445 1.00 .98 1.03 Chicago, IL .459 .68 .85 .85 Houston, TX .494 .89 .93 .87 New York, NY .857 .68 .89 .90 aElasticity is the proportion of the metropolitan area population that lives in the central-city named in the title of the Primary Metropolitan Statistical Area. (When two central cities are named in the title of the Primary Metropolitan Statistical Area, the population of both are counted as living in the primary central city.)
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From page 46... ...
Income differences are particularly striking: The median income of black households living in a metropolitan area was just 61 percent that of the median TABLE 3-7 Comparison of Selected Outcomes for Different Racial Groups, 1990 Population in Metropolitan Areas Outcomes for Different Racial Groups Ratios of Outcomes Black to Hispanic to Outcome NHW Black Hispanic NHW NHW Median household Income $34,676 $21,247 $25,009 .61 .72 Per capita income $17,559 $9,414 $8,603 .54 .49 Poverty rate 7.7% 27.5% 24.5% 3.6 3.18 Percent employed, men 25-54 90.3% 72.5% 82.6% .8 .91 Unemployment rate, men 25-54 3.9% 11.5% 14.1% 2.95 3.62 Percent high school graduates, men 25-34 89.4% 76.0% 55.7% .85 .62 Note: NHW, non-Hispanic white. Source: U.S.
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From page 47... ...
Per capita income (constant dollars) Poverty rate Percent employed, men ages 25-54 Unemployment rate, men ages 25-54 High school graduates, men age 25 and older 5.6 19.4 2.4 -.6 .0 12.0 6.7 13.4 -.7 -4.9 15.0 19.9 Source: U.S.
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From page 48... ...
For Hispanics, the difference may be due to the fact that recent Hispanic immigrants tend to settle in larger metropolitan areas (Barter, 1989~. These regional and population size averages, of course, conceal considerable variation across individual metropolitan areas.
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. 49 largest metropolitan areas (Nassau County, NY, is omitted since it has no central city)
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. TABLE 3-12 Disparities Between Hispanics and Non-Hispanic Whites in the 15 Largest Metropolitan Areas, 1990 Ratio of Hispanic to Non-Hispanic White Outcome Metropolitan Employment Rate, Percent High School Statistical Area Per Capita Income Men 16-64 Graduates, Men 25-34 Anaheim, CA .38 .95 .48 Atlanta, GA .66 .95 .71 Boston, MA .46 .85 .71 Chicago, IL .4 .94 .55 Dallas, TX .39 .94 .45 Detroit, MI .64 .89 .82 Houston, TX .38 .95 .47 Los Angeles, CA .32 .95 .47 Minneapolis, MN .52 .92 .86 New York, NY .34 .86 .67 Philadelphia, PA .43 .79 .66 Riverside, CA .51 .95 .6 St.
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. As evidence, proponents of the spatial mismatch hypothesis point to high unemployment rates in many central cities at the same time that metropolitan labor markets are tight and jobs are apparently available in suburbs.
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that, although racial differences in youth employment rates are only modestly lower in smaller than in larger metropolitan areas, the importance of job accessibility as a determinant of these racial employment gaps is directly proportional to metropolitan size and is unimportant for metropolitan areas of less than 1 to 1.5 million people. This, by inference, casts doubt on the importance of the distance factor in larger metropolitan areas as well and suggests that dynamics other than distance, such as lack of connection to job information networks and social isolation, may be important factors at work in explaining employment disparities between black and white youth.
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From page 53... ...
, and to the ratio of black mean household income to metropolitan mean household income in metropolitan areas (the higher the ratio of black mean household income to metropolitan-area mean household income, the lower the neighborhood poverty rate) (Jargowsky,1997~.
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(1992) found that other community characteristics area median income, unemployment rate, and percentage of families that are female headed with childrenwere unrelated to the economic outcomes of sons, and neighborhood poverty rates were related to future economic outcomes of white men, but not of black men or white women (Corcoran and Adams, 1997~.
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From page 55... ...
The theoretical and conceptual literature concerned with neighborhood effects suggests that these effects are nonlinear that is, that there is some threshold of neighborhood poverty at which negative external effects appear, whereas previously they did not. Thus, an increase in the percentage of poverty households in a neighborhood from 10 to 20 percent might be unlikely to have any of the hypothesized adverse neighborhood effects, whereas an increase from 20 to 40 percent (the conventionally used indicator of high-poverty neighborhoods)
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Furthermore, they emphasize what we do not know (1997: 834-835~: "the existing evidence is inconclusive when it comes to determining which neighborhood conditions matter most, how neighborhood characteristics influence individual behavior and well-being, or how neighborhood effects may differ for families with different characteristics." A few recent studies have tried to sort out the relative impact of spatial mismatch (job accessibility) and neighborhood effects on labor market outcomes.
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From page 57... ...
Indeed, racial segregation does seem to be linked to concentrations of poverty among low-income blacks; in 1990,34 percent of poor blacks, but only 6 percent of poor whites, lived in areas of highly concentrated poverty (Jargowsky, 1997~. Similarly, to the extent that racial segregation is involuntary and disproportionately confines blacks to central-city residence, then the negative effects of spatial mismatch will contribute to black-white disparities.
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investigated the link between the extent of racial segregation in metropolitan areas and the extent of central-city suburban disparities as measured by a city-suburban index of disparities. Controlling for region, population size, percentage of blacks and Hispanics in the metropolitan-area population, and poverty rate, she found that both black-white segregation and Hispanic-white segregation are positively related to disparities;
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From page 59... ...
Similarly, when economic stratification occurs by jurisdiction, as between the typical central city and its middle- and higher-income suburbs, residents of the lower-income jurisdictions will be faced with lower levels of service, or higher tax burdens, or both. Disparities in public service, such as education and public health, may be translated into disparities in outcomes among residents of jurisdictions in terms of future income and employment.
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From page 60... ...
Since most public services can be considered to a large extent consumption goods, lower levels of public services (or the necessity of accepting a higher tax burden in order to receive equivalent levels) in themselves represent a disparity resulting from metropolitan-area structure that adversely affects the well-being of those who live in jurisdictions with inadequate fiscal capacity.
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From page 61... ...
, on metropolitan-area opportunity structures and outcome disparities is a question of great interest and controversy, and the empirical evidence is sparse and contradictory. On one hand, larger metropolitan areas may affect the spatial mismatch problem by increasing distances between the central city and suburban workplaces; they may also intensify the impact of social isolation, since information on labor market opportunities may be more readily available in smaller areas.
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From page 62... ...
found that increasing labor market tightness, as measured by either declines in the unemployment rate or by increases in the ratio of employment to the working-age population, was positively correlated with city-suburban disparities: as labor markets tightened, disparities increased. They then examined central-city/suburban per capita income disparities in a cross-sectional multivariate model, using employment as a percentage of working-age population as a variable to measure labor market tightness and control
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From page 63... ...
Hill and Wolman conclude (1997b:577) that "economic growth, bringing about tighter labor markets, is clearly desirable, but it is not a cure for inner-city poverty and will not narrow gaps between central-city and suburban incomes in and of itself." In related research, Pastor and colleagues (1997:Ch.
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From page 64... ...
tested for the effect of elasticity (defined as the population of central cities in a metropolitan statistical area, MSA, as a percentage of MSA population) on her index of city-suburban disparities in a multivariate model that includes region, various metropolitan demographic characteristics, and government structure.
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From page 65... ...
Since fragmentation increases the potential for choice and thus sorting, we would also expect fragmentation to be positively related to income segregation in metropolitan areas (Bradford and Oates, 1974; Mills and Oates, 1975) and, since race and income are correlated, to racial segregation.
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, however, found that fragmentation (number of general-purpose governments per 100,000 people) is negatively and significantly related to an index of disparities in a multivariate model that includes region, metropolitan demographic characteristics, and elasticity: the greater the degree of fragmentation, the lower the disparity between central city and suburbs.
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He found that his fragmentation index was positively and significantly related to average commuting time. Other Causes With Spatial Components We now turn to causes of disparities in outcomes between residents of central cities and their suburbs and between minorities and whites that are traditionally conceived of as less related, or unrelated, to metropolitan phenomena.
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From page 68... ...
in central cities has meant that central-city jobs are no longer functionally accessible to less-educated city residents, even if they are physically accessible. Meanwhile, opportunities for the relatively less-skilled jobs that might be appropriate for less-educated city residents are constrained by the spatial mismatch problems discussed earlier.
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From page 69... ...
to calculate the effects of differences in the levels of segregation across metropolitan areas (as measured by the dissimilarity index) on several major outcomes for young blacks in these areas: high school graduation, college graduation, the probability of not being employed, the log of annual earnings, and the probability of being a single mother.
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From page 70... ...
Thus, an increase in black high school dropout rates due to an increase in segregation will lead to huge increases in crime. Assuming young black males account for approximately 30 to 40 percent of serious crime in less-segregated metropolitan areas, Holzer calculated that the impact of moving from low to high segregation levels will increase serious crime in the metropolitan area by 45 to 60 percent.
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When labor markets are tight, the costs to employers of attracting and keeping good employees can be especially high. Finally, the costs of central-city crime to suburban residents are likely to be substantial.
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In the absence of equalizing aid from higher levels of government, residents in local governments with low tax capacity or higher expenditure needs are faced with a difficult choice: they must either pay a higher percentage of their income in taxes than do wealthier communities in order to obtain equal levels of public services, or, if they tax themselves at a comparable rate, they must accept lower levels of public services. To the extent that tax/service disparities reflect differences in tax capacity and service need rather than preference, the committee considers them undesirable both in terms of their impact on the spatial opportunity structure of metropolitan areas and in terms of equity.
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From page 73... ...
In addition, they serve to reduce the wealth of existing owners of homes in central cities, most of whom, as the result of selective out-migration, have low and moderate incomes. As the tax burden of central-city residents increases and public services deteriorate, the value of the homes of existing homeowners declines to reflect these changes, thus bringing about a real decline in the value of their capital assets.
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From page 74... ...
Both the revenue and the expenditure capacity estimates were indexed to the average for the entire metropolitan area, so that the average overall fiscal capacity value was 100. An overall fiscal capacity index was created by dividing the ownsource general revenue index for a local government by its index of representative expenditures.
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From page 75... ...
And a city with a large proportion of its property tax base in the form of business property, with a large proportion of its retail sales to nonresident commuters or tourists, or with a large proportion of earnings generated in the city accruing to nonresident commuters, can substantially increase its revenues by exporting tax burdens to nonresidents." Differences in the expenditure needs of local governments (defined as the amount of money local governments must spend in order to achieve a standardized package of public services) reflect differences in the costs they face of providing public services.
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From page 76... ...
Furthermore, a city with a poverty rate one standard deviation above the 1982 mean must pay 36.4 percent more for police services than a city with average poverty. The size of a city, as measured by its population, and the amount of its economic activity, as measured by private employment per capita, also increase the costs of public services." It is clear that, given their population characteristics, central cities are likely to have both low standardized revenue-raising capacity and high expenditure needs.
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6 In particular, they were able to utilize a "value added" approach to track changes in educational performance over time for individual students, to isolate instructional spending from total educational spending, and to utilize measures of actual class size rather than school or district averages of teacher-pupil ratios. 7 In metropolitan areas in which there is more than one central city, they included the largest central city, but included smaller central cities only if their population was over 100,000.
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From page 78... ...
However, taxes as a percentage of family income (tax burden) were an average of 44 percent higher in the central cities, and Bahl notes (1994:297)
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