In a new paper titled “The End of the American Dream? Inequality and Segregation in US Cities” published by the Journal of Political Economy, Senior Consultant Mark Ponder, Federal Reserve Bank of Minneapolis Monetary Advisor Alessandra Fogli, University of Chicago Booth School of Business Professor Veronica Guerrieri, and Bocconi University Assistant Professor Marta Prato examine how rising inequality has reshaped American cities since the 1980s. The authors’ analysis shows that widening income differences have been accompanied by greater residential segregation, with affluent families concentrating in some neighborhoods while lower-income households are clustered in others. This divide extends beyond geography, influencing access to schools, economic opportunities, and children’s prospects for upward mobility. 
 
The authors highlight evidence from the Moving to Opportunity program, in which families who relocated to lower-poverty areas saw improved outcomes for their children. Their findings show how neighborhood environments shape life chances and why addressing segregation is central to reducing inequality.