NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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Sijie Li

Department of Economics
University of Pittsburgh
4519 Wesley W. Posvar Hall
Pittsburgh, PA 15260
Tel: 617-412-5369

E-Mail: EmailAddress: hidden: you can email any NBER-related person as first underscore last at nber dot org
Institutional Affiliation: University of Pittsburgh

NBER Working Papers and Publications

May 2019Racial Segregation in Housing Markets and the Erosion of Black Wealth
with Prottoy A. Akbar, Allison Shertzer, Randall P. Walsh: w25805
Housing is the most important asset for the vast majority of American households and a key driver of racial disparities in wealth. This paper studies how residential segregation by race eroded black wealth in prewar urban areas. Using a novel sample of matched addresses from prewar American cities, we find that over a single decade rental prices soared by roughly 50 percent on city blocks that transitioned from all white to majority black. Meanwhile, pioneering black families paid a 28 percent premium to buy a home on a majority white block. These homes then lost 10 percent of their original value as the block became majority black. These findings strongly suggest that segregated housing markets cost black families much of the gains associated with migrating to the North.
 
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