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The Long-Run Effects of the 1930s Redlining Maps on Children

  • Daniel Aaronson
  • Daniel Hartley
  • Bhashkar Mazumder
  • Martha Stinson
Journal of Economic Literature
vol. 61, no. 3, September 2023
(pp. 846-62)
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Abstract

We estimate the long-run effects of the 1930s Home Owners Loan Corporation (HOLC) redlining maps by linking children in the full count 1940 census to 1) the universe of Internal Revenue Service (IRS) tax data in 1974 and 1979 and 2) the long form 2000 census. We use two identification strategies to estimate the potential long-run effects of differential access to credit along HOLC boundaries. The first strategy compares cross-boundary differences along HOLC boundaries to a comparison group of boundaries that had statistically similar preexisting differences as the actual boundaries. A second approach only uses boundaries that were least likely to have been chosen by the HOLC based on our statistical model. We find that children living on the lower-graded side of HOLC boundaries had significantly lower levels of educational attainment, reduced income in adulthood, and lived in neighborhoods during adulthood characterized by lower educational attainment, higher poverty rates, and higher rates of single-parent households.

Citation

Aaronson, Daniel, Daniel Hartley, Bhashkar Mazumder, and Martha Stinson. 2023. "The Long-Run Effects of the 1930s Redlining Maps on Children." Journal of Economic Literature, 61 (3): 846-62. DOI: 10.1257/jel.20221702

Additional Materials

JEL Classification

  • G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
  • I26 Returns to Education
  • I32 Measurement and Analysis of Poverty
  • J13 Fertility; Family Planning; Child Care; Children; Youth
  • N32 Economic History: Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy: U.S.; Canada: 1913-
  • R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
  • R31 Housing Supply and Markets