Greater racial integration would boost US growth, according to Moody’s

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The gain would be an “economic game changer,” wrote economists Mark Zandi, Dante DeAntonio, Kwame Donaldson and Matt Colyar. “This is real money that could dramatically improve the long-term financial success of all Americans.”

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Racial integration is essential as the United States moves to become a nation where minorities represent the majority of the population.

The Moody’s article calculated a racial integration score for each county based on Census Bureau demographic data on census tracts, which are smaller parcels of land. Counties where the racial distribution of the leaflets matched the overall racial distribution of the county were considered “fully racially integrated.” In other words, in such counties, racial or ethnic groups are not concentrated in small areas.

For the more than 400 counties with 30 or more census tracts, the study found a strong positive relationship between racial integration and real GDP growth, after controlling for factors such as population growth, employment and income. Less integrated counties have experienced lower growth whether they are predominantly white or non-white.

The researchers found that Kings County (Brooklyn) and Queens County in New York were highly segregated, as were Essex County in New Jersey and Cook County in Illinois, which includes Chicago. They identified Wayne County, Michigan, home to Detroit, as the most segregated, densely populated county in the country.

In contrast, populated counties that are more racially integrated include Hidalgo and El Paso on the Texas border with Mexico and areas in the suburbs of Boston and Philadelphia, such as Middlesex County in Massachusetts and County of Montgomery, Pennsylvania.

If Wayne County suddenly became the most integrated county in the country, its real GDP would grow by more than 8% per year over the next decade, according to the analysis.

The authors recognize that the exercise involves an unrealistic change in racial integration. Yet “even smaller improvements in integration have a significant economic benefit,” they said.

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