School segregation undermines U.S. economic mobility and dynamism

School segregation—far from being a topic relegated to debates about school busing in the past or something that is only relevant in the South—is an issue very much present and alive today. Just in the past week, a decision about whether the state would take over some of the schools in Little Rock, Arkansas, raised concerns that the home of the Little Rock Nine would be resegregated, and a story came out about the racist reactions to a plan to desegregate schools in Howard County, Maryland.

Adding to the chorus of voices calling for renewed attention to the issue of school segregation is a new report, “U.S. school segregation in the 21st century: Causes, consequences, and solutions,” by former Equitable Growth Research Assistant Will McGrew. He draws upon the latest social science research into the persistence and resurgence of school segregation, examining trends in racial and socioeconomic school segregation since 1954 and the key legal and economic drivers of these trends in school segregation through to the present day. McGrew then breaks down the empirical effects of school segregation on economic inequality, mobility, and growth, concluding with a set of policy recommendations.

Throughout, he uses the research to make the case that school segregation is not an inevitable outcome of individual preferences or choices, but rather is highly responsive to legal and policy decisions. The consequences of school segregation on economic mobility are of particular concern because they lock in and perpetuate inequalities in economic outcomes between white Americans and Americans of color, particularly black and Latinx Americans.

Furthermore, by limiting children’s ability to reach their full potential, school segregation obstructs the future dynamism of the U.S. economy. As the U.S Supreme Court decision in Brown v. Board of Education—the 1954 ruling that school segregation is unconstitutional—clearly stated, separate is inherently unequal. And by trapping low-income and black and Latinx students in poorly resourced schools, segregation obstructs their human capital development and limits their exposure to examples and options for their future, thereby hurting their individual economic outcomes, as well as future U.S. economic dynamism and growth.

In his report, McGrew highlights the research of economists Stephen B. Billings of the University of Colorado, David J. Deming at the Harvard Kennedy School of Public Policy, and Jonah Rockoff at Columbia University to present the consequences of renewed school segregation. They found that when busing, and therefore desegregation, ended in the Charlotte-Mecklenburg, North Carolina, school district in the early 2000s, test scores and high school graduation rates fell for both white and black students in the newly segregated, high-poverty schools. Conversely, McGrew cites research by University of California, Berkeley economist Rucker Johnson, who found that among black students, the average effects of 5 years of exposure in desegregated schools led to about a 15 percent increase in wages and a 11 percentage point decline in the annual incidence of poverty in adulthood.

Other research by Harvard University doctoral student and Equitable Growth grantee Alex Bell, Harvard economist and former Equitable Growth Steering Committee Member Raj Chetty, and their co-authors examines who becomes an inventor. They found that exposure to innovation during childhood is a key determinant of who grows up to become an inventor. McGrew, in his report, weaves these findings together with research by Michigan State University economist and Equitable Growth Research Advisory Board member Lisa Cook, who details the obstacles that women and black and Latinx people face in becoming inventors, including the discrimination they encounter. The consequences of these obstacles are too many individuals being held back from reaching their full potential because of segregation, and the U.S. economy missing “lost Einsteins” and “lost Katherine Johnsons,” whose innovations could boost output and dynamism in the economy as a whole.

School segregation is not an inevitable outcome of individual choices or preferences. In fact, the “preferences” that lead high-income, white families to choose to buy homes in “good” school districts are, in fact, themselves shaped by policy decisions that continue to tie primary and secondary school financing to local property taxes. Policymakers who use the excuse of “personal preferences” ignore the evidence that desegregation efforts did work and had positive impacts on students’ outcomes both as students and as workers. Allowing what little progress was made during the brief period of court-ordered school desegregation to erode and reverse risks not only the individual opportunities of millions of kids to reach their full potential but also the strength of the broader U.S. economy.



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