Effects of Racial Segregation on Economic Productivity in U.S. Cities

TL;DR

This paper extends urban scaling theory to include homophily and heterophobia, showing that racial segregation in U.S. cities negatively impacts economic productivity, with effects intensifying over the 2010s.

Contribution

It introduces a mathematical model linking racial segregation and social interaction patterns to urban economic outputs, advancing urban science theory.

Findings

Higher racial segregation correlates with lower economic output.

The negative impact of segregation on economy increased during the 2010s.

Model validation with empirical data supports the theoretical framework.

Abstract

Homophily and heterophobia, the tendency for people with similar characteristics to preferentially interact with (or avoid) each other are pervasive in human social networks. Here, we develop an extension of the mathematical theory of urban scaling which describes the effects of homophily and heterophobia on social interactions and resulting economic outputs of cities. Empirical tests of our model show that increased residential racial heterophobia and segregation in U.S. cities are associated with reduced economic outputs and that the strength of this relationship increased throughout the 2010s. Our findings provide the means for the formal incorporation of general homophilic and heterophobic effects into theories of modern urban science and suggest that racial segregation is increasingly and adversely impacting the economic performance and connectivity of urban societies in the U.S.