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In recent decades two broad trends in American society have been well–documented: rising income inequality and rising segregation of economic classes across space in metropolitan areas. The thesis of this article is that rising economic segregation is both a cause of rising economic inequality and amplifies its effects in ways that do not showup in the income statistics. The article synthesizes the evidence on the contextual effects of economic segregation in three areas: 1) jobs and income; 2) public services; and 3) retail services. Economic segregation does not only undermine equal opportunity, it also damages American democracy. Although more research is needed on the effects of economic segregation, the evidence is more than sufficient to call for public action.