Stuck behind the lines: how does redlining affect educational attainment and occupational structure in Chicago?

Abstract

In the late 1930s, U.S. government officials established the Home Owners' Loan Corporation (HOLC) to minimise home foreclosures. The HOLC graded neighbourhoods according to their perceived credit risk from A to D. Consequently, low-grade areas (C and D) were denied credit, a practice now defined as 'Redlining'. This paper investigates the long-term effects of historical Redlining practices on educational attainment and occupational structure in Chicago. Using geographical software, census tract data, and multivariable regression analysis, I analyse the relationship between being assigned a low-grade and levels of educational attainment and access to high-paying jobs. The results show that residents of low-grade neighbourhoods have lower educational achievement, and have restricted access to high-paying jobs, due to limited broadband infrastructure, lower education, and greater job distance. Moreover, I find differences in educational and occupation outcomes between C and D areas and provide possible explanations for them. These findings demonstrate the enduring impact of historical discriminatory practices on present-day socioeconomic outcomes. Importantly, they highlight the need for comprehensive policies that address systemic inequalities and promote economic mobility in these formerly low-grade areas.