The effect of discrimination on black-white racial segregation is studied using a confidential supplement of the Panel Study of Income Dynamics (PSID). Audit studies reveal that the rate of discrimination in rental housing is substantially higher than in owner-occupied housing. Thus, a variable...

"Between 1940 and 1980, the rate of homeownership among African-American households increased by close to 40 percentage points. Most of this increase occurred in central cities. We show that rising black homeownership was facilitated by the filtering of the urban housing stock as white...