Inequality and the "Big Sort"

Peter Orszag has a scholarly op-ed in Bloomberg where he points to the pernicious consequences of widening inequality,

"To a stunning degree, Americans are increasingly moving into neighborhoods with other people who have similar incomes and share their political views. Bill Bishop and Robert Cushing... and others have documented the way Americans increasingly live near people with similar political views. This residential sorting by political party has occurred despite an ongoing overall decline in housing mobility."

He points to a new study by Sean Reardon and Kendra Bischoff who find that Americans are increasingly choosing to live near people in their own income bracket. They find that whereas almost two-thirds of American families lived in middle-income neighborhoods in 1970, it declined to just 44% by 2007. Further, the share of those living in a poor neighborhood, in the same period, more than doubled, from 8% to 17%, and those living in an affluent neighborhood rose from 7% to 14%. Another study by Tara Watson concluded that trends in income inequality can fully explain recent increases in economic segregation.

More worryingly, these trends are also impacting voting patterns. Orszag points to Andrew Gelman who has shown how "within any given state, higher-income people are much more likely to vote Republican". Orszag writes,

Gelman finds that although, in any state, higher- income people are more likely to be Republican, the link between income and party affiliation in blue states is less dramatic than it is in red ones. In other words, as you move up the income scale in a Democratic state, the proportion of Republicans rises, but not as much as it does in a Republican state. That higher-income people in red states are so much more likely to vote Republican helps explain the blue state-red state conundrum. My personal experience is consistent with this: It is rare to meet a high-income Democrat in a red state.

His conclusion is instructive,

Residential segregation by income has been increasing markedly, and since income is strongly related to voting patterns, this phenomenon may help explain the rise in residential segregation by political party. As we surround ourselves with people like us, we reinforce our own views, and the result is a more polarized population.