Increasing income inequality is changing the way people in the U.S. live, new research says

Published: Friday, Jan. 11 2013 2:54 p.m. MST

Increasing income inequality is changing the way people live in the U.S., according to new research by the Stanford School of Education

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Although some financial inequality has always existed in America, the difference between the rich and the poor has jumped significantly in the past decade.

According to the Congressional Budget Office the average real after-tax household income of the top 1 percent rose 275 percent from 1979 to 2007. Meanwhile, income for the remainder of the top quintile (81st to 99th percentile) grew 65 percent. Income for the majority of the population in the middle of the scale (21st through 80th percentiles) grew just 37 percent over the same period. And the bottom quintile experienced the least growth income at just 18 percent.

Considerable energy has been put into explaining these trends. Explanations include a failure to invest in education, de-unionization, globalization, and income tax breaks for wealthy Americans.

What are less examined however, are the ways rising income inequality impacts the way we live, who we associate with, and where our children go to school. However, a study by Sean F. Reardon and Kendra Bischoff of the Stanford School of Education sheds some light on these impacts. In summary, their findings suggest that higher-income and lower-income people are interacting with each other less and less.

Reardon and Bischoff found that increasingly the wealthy are living together. Using data from the 100 largest metropolitan areas in the United States from 1970 to 2000, Reardon and Bischoff found a strong relationship between rising income inequality and rising income segregation.

The rise of highly segregated high- and low-income neighborhoods results in high- and low-income public schools, according to their research. Not surprisingly Reardon found that students at schools that draw from high-income neighborhoods score better on math and reading tests than schools that draw from low-income neighborhoods.

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