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

Aaronson, Daniel; Faber, Jacob; Hartley, Daniel; Mazumder, Bhashkar; Sharkey, Patrick

doi:10.21033/wp-2020-33

Working Paper

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

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;

https://doi.org/10.21033/wp-2020-33