Segregation, Spatial Externalities, and Political Polarization

• In Event: Inequality

Abstract

Why do cities of comparable size and level of inequality have such different amounts (i.e., sheer level and spatial distribution) of public goods provision? When do the middle class prefer public goods that also benefit poor? I argue that the degree of class-based segregation largely explains this difference across cities. I examine an unexplored mechanism that confounds the link between segregation and public goods: the spatial externalities of inequality. I argue that once in place, socioeconomic segregation in cities creates enduring patterns in negative spatial externalities (i.e., fear of crime, exposure to open sewerage) between income groups in heterogeneous localities. The middle and upper-class’ exposure to the spatial externalities of inequality from slums or “ghettos,” in turn, induces preferences for certain public goods and also their vote for leftist (pro-poor) political candidates. Through this mechanism, segregation either polarizes or unifies political preferences between the rich and the poor in cities. To test this argument, I create a shift-share measure of predicted migration of the rural poor to urban census areas to use as an instrument for neighborhood-level segregation in the megacity of São Paulo, Brazil. The instrument predicts migration using a slew of rural "push factors" (i.e., share of "cash crops," rural land inequality, adoption of genetically modified soy and maize) and assigns predicted in-migration into destination census areas, using historical settlement patterns. I combine this instrumental variable approach with an original face-to-face survey of 4,011 households conducted across 408 of the 456 census areas in São Paulo. Using embedded vignettes and two conjoint surveys also administered face-to-face across census areas, I test the spatial externalities effect against alternative mechanisms –racial threat, social affinity or altruism, and contact hypothesis— proposed in the literature.

Author

• Alice Z Xu, Harvard University