Rising Local Wealth Concentration and the Uneven Decline of the American Community

• In Event: New Frontiers in Inequality, Poverty, and Mobility Research

Abstract

This study asks whether rising local wealth concentration helps explain why some places experience sharper declines in community life than others. I link commuting-zone wealth estimates from GEOWEALTH-US to county-level counts of membership organizations and geo-linked measures of informal social connection from restricted-use General Social Survey data. To address endogeneity from selective migration and local shocks, I implement a shift–share instrumental-variable design that leverages national wealth trends interacted with predetermined local exposure. Results show that increases in wealth concentration predict declines in the density of local membership organizations: a 10-percentage-point increase corresponds to roughly 1.5 fewer organizations per 10,000 residents, with the sharpest declines in domains tied to shared economic life and public leisure rather than religious organizations. Wealth concentration also predicts reduced routine socializing, while religious attendance remains comparatively stable. The decline in socializing is concentrated among respondents with incomes below the median, with no corresponding effect among those above the median, consistent with the idea that rising local concentration of affluence constrains participation for less advantaged residents that can’t keep up with rising unaffordability. Taken together, the findings indicate that local wealth concentration thins the organizational and interpersonal infrastructure of shared local life.

Author

• Manuel Schechtl, University of North Carolina at Chapel Hill