Over the past few decades, U.S. cities have changed dramatically, largely because of two major trends: the fall of violence and the rise of urban inequality. Despite the attention given to each of these trends, little research has assessed how they are related to each other. This study is the first to generate causal evidence on the impact of violent crime on economic residential segregation. We document the effect of the crime drop on economic segregation in 500 U.S. cities between 1990 and 2010, using exogenous shocks to city crime rates to identify causal effects. We find that declining violent and property crime reduced low-income household segregation but had no effect on affluent households. Our findings indicate that the crime decline has not overturned the trend toward rising economic segregation but has slowed its pace. Additional analyses suggest that declining crime reduced low-income household segregation by drawing more White and college-educated residents to the poorest neighborhoods of 1990. We also find suggestive evidence that declining violence led poor households to migrate out of low-income neighborhoods, reflecting a pattern of gentrification. Descriptive analyses of tract-level data from five cities show that neighborhoods with sharper declines in violence became less socioeconomically disadvantaged. Despite continued rising economic inequality, the crime decline has had its greatest impact on concentrated poverty, long seen as one of the most harmful dimensions of urban inequality.

Keywords: Economic segregation; Urban inequality; Violent crime.

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