The Racial Wealth Gap and Access to Opportunity Neighborhoods

A new Cleveland Fed Economic Commentary finds that some Black households live in neighborhoods with lower incomes, as well as higher unemployment rates and lower educational attainment, than their own incomes might suggest—and that this may impede their economic mobility.

Researchers Dionissi Aliprantis, Daniel Carroll, and Eric Young investigate reasons for these neighborhood sorting patterns and find that differences in factors such as income, wealth, or housing costs between Black and white households do not explain racial distributions across neighborhoods.

Instead, their findings suggest other factors might be at work, including discrimination in the housing market, ongoing racial hostility, or preferences by Black households for the strength of social networks or other amenities in some lower-socioeconomic locations.

“Our findings indicate that, at least in terms of neighborhood sorting, we should view wealth as more of a consequence than a cause,” the authors write.

Read the Economic Commentary: The Racial Wealth Gap and Access to Opportunity Neighborhoods

Federal Reserve Bank of Cleveland

The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.

The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.

Media contact

Doug Campbell, doug.campbell@clev.frb.org, 513.218.1892