I found this passage particularly interesting:
Every one of the 10 largest metropolitan areas experienced drops in both dissimilarity and isolation of 3.6 points or more. The isolation index is below 45 percent in every one of those 10 largest areas, except for Chicago. Long among the most segregated places in America, the Windy City has experienced a particularly dramatic decline in segregation since 2000.
The general decline in segregation has also been accompanied by a change in its nature. Before 1968, segregation is best understood as the result of hard, if often informal, barriers against black mobility. There were neighborhoods that were simply off-limits. The effect was that blacks paid more for housing, especially in more segregated cities.
A core economic idea is that people pay higher prices when their choices are limited, whether those limits come from tariff barriers or racial restrictions. Thirty-five years ago, the economists John Kain (one of my mentors) and John Quigley found that blacks paid more than whites for comparable housing. My work with Cutler and Vigdor found that before 1970, the price and rent premium paid by blacks increased in more segregated areas, as you would expect of a group that had a more limited set of housing choices.
After 1970, however, that pricing pattern switched. By 1990, blacks were paying less for housing than whites, especially in more segregated metropolitan areas. This switch can be explained if segregation, post-1970, reflects white preferences rather than barriers preventing black mobility. If the segregation that remains is the result of whites liking to live in primarily white neighborhoods, then we should expect whites to pay a price for limiting their own choices, and that is exactly what the data show.
Glaeser goes on to note that much of the decline in segregation can be attributed to the shift of educated black Americans into neighborhoods that are predominantly white. As a result, today’s segregated communities are more culturally isolated from the wider society. That is, people who in an earlier era might have served as a “bridge” to the world outside of the segregated neighborhood are far less likely to have remained in segregated neighborhoods.
This goes back to a recurring theme in this space: when all you have is a hammer, every problem looks like a nail. As Glaeser suggests, the intense cultural and economic isolation of segregated neighborhoods in 2012 (a bad thing) flows from the fact that educated members of historically disempowered groups have enjoyed considerable upward mobility and have chosen to sort into neighborhoods and social networks that will facilitate further upward mobility (a good thing). This is not a problem that will be “solved” through transfers. There are interventions that could reduce cultural and economic isolation. But we have to acknowledge that cultural and economic isolation is actually a problem and that while some transfers can reduce cultural and economic isolation, others can actually exacerbate it.