Understanding trends and drivers of urban poverty in American cities

Abstract

Urban poverty arises from the uneven distribution of poor populations across neighborhoods of a city. We study the trend and drivers of urban poverty across American cities over the last 40 years. To do so, we resort to a family of urban poverty indices that account for features of incidence, distribution, and segregation of poverty across census tracts. Compared to the universally-adopted concentrated poverty index, these measures have a solid normative background. We use tract-level data to assess the extent to which demographics, housing, education, employment, and income distribution affect levels and changes in urban poverty. A decomposition study allows to single out the effect of changes in the distribution of these variables across cities from changes in their correlation with urban poverty. We find that demographics and income distribution have a substantial role in explaining urban poverty patterns, whereas the same effects remarkably differ when using the concentrated poverty indices.