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Few studies have estimated the causal effect of school accountability ratings on racial and economic segregation between schools. We fill this gap by using administrative data on North Carolina public schools. Leveraging a continuous assignment variable with a cutoff that separates schools with an F (i.e., failing) accountability grade from schools that are not labeled as failing, we estimate regression discontinuity models that compare racial and economic segregation between D and F schools. We find that white students disproportionately enroll in D schools over F schools in districts that serve primarily nonwhite students. Results for economic segregation are not statistically significant. This study highlights the need for policy conversations that recognize the direct effect of school accountability on racial segregation.