The Long-Run Effects of the 1930s HOLC 'Redlining' Maps on Place-Based Measures of Economic Opportunity and Socioeconomic Success

41 Pages Posted: 15 Dec 2020

See all articles by Daniel Aaronson

Daniel Aaronson

Federal Reserve Bank of Chicago

Jacob Faber

NYU Robert F. Wagner School of Public Service ; Princeton University - Department of Sociology

Daniel A. Hartley

Federal Reserve Bank of Chicago

Bhashkar Mazumder

Federal Reserve Bank of Chicago

Patrick Sharkey

affiliation not provided to SSRN

Date Written: November 24, 2020

Abstract

We estimate the long-run effects of the 1930s Home Owners Loan Corporation (HOLC) redlining maps on census tract-level measures of socioeconomic status and economic opportunity from the Opportunity Atlas (Chetty et al. 2018). We use two identification strategies to identify the long-run effects of differential access to credit along HOLC boundaries. The first compares cross-boundary differences along actual HOLC boundaries to a comparison group of boundaries that had similar pre-existing differences as the actual boundaries. A second approach uses a statistical model to identify boundaries that were least likely to have been chosen by the HOLC. We find that the maps had large and statistically significant causal effects on a wide variety of outcomes measured at the census tract level for cohorts born in the late 1970s and early 1980s.

Keywords: Redlining; access to credit; segregation; HOLC; economic opportunity; intergenerational mobility

JEL Classification: H81, O18, R21, R23, R31

Suggested Citation

Aaronson, Daniel and Faber, Jacob and Hartley, Daniel A. and Mazumder, Bhashkar and Sharkey, Patrick, The Long-Run Effects of the 1930s HOLC 'Redlining' Maps on Place-Based Measures of Economic Opportunity and Socioeconomic Success (November 24, 2020). FRB of Chicago Working Paper No. 2020-33, Available at SSRN: https://ssrn.com/abstract=3742984

Daniel Aaronson

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604-1413
United States

Jacob Faber

NYU Robert F. Wagner School of Public Service ( email )

The Puck Building
295 Lafayette Street, Second Floor
New York, NY 10012
United States

HOME PAGE: http://www.jacobfaber.com/

Princeton University - Department of Sociology ( email )

Princeton, NJ
United States

Daniel A. Hartley (Contact Author)

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
United States

HOME PAGE: http://www.danielaaronhartley.com

Bhashkar Mazumder

Federal Reserve Bank of Chicago ( email )

230 South LaSalle Street
Chicago, IL 60604
United States

Patrick Sharkey

affiliation not provided to SSRN

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