The past four decades have witnessed a substantial increase in income inequality, especially among families with children. The growth in inequality evokes different scenarios for different observers. Some observers describe a “boomtown” inequality, in which areas such as Silicon Valley, New York, and Washington DC have pulled away from the rest of the country, prospering disproportionately from the growth in technology, finance, and government outsourcing. Other observers describe a “millionaire-next-door” inequality in which the increasingly rich and the persistently poor live near each other in the same school districts—like the Neptune, California of the television show Veronica Mars where “your parents are either millionaires or your parents work for millionaires.”
Our project contrasts these two scenarios by tracking the growth in income inequality from 1970 to 2009, and asking whether most of of the growth has occurred between different school districts or among families who live in the same school districts. In answering this question, we develop new statistical methods for analyzing the coarse income data that are available for school districts.