How Innovation Leads to Economic Segregation

The urban revival of the past two decades has led to a striking contradiction. As high-tech talent and industry have moved back to many cities, increasing their economic output and lowering unemployment rates, these cities have become increasingly unequal. Now a new study documents in meticulous detail the extent to which rising innovation and deepening economic segregation in cities are two sides of the same coin.

The study, by economists Enrico Berkes of Northwestern University and my University of Toronto colleague Ruben Gaetani, uses sophisticated statistical modeling to parse out the connection between innovation and economic segregation. The study makes use of the researchers’ database of more than 2 million geographically coded and referenced patents (which I previously wrote about here) for U.S. metros (measured as commuting zones), going back more than 40 years. In this study, they specifically compare patent data to measures of economic segregation across census tracts—measures including income, educational, and occupational segregation—for the period 1990–2010. Their models include a wide range of variables to control for population, income levels, industry differences, and political and economic factors over this period.