Does residential segregation affect the generosity of welfare policies ?: Evidence from US states

This study examines how residential segregation shapes the racial politics of welfare generosity in the United States. Despite rising racial diversity, residential segregation remains a persistent structural feature that influences intergroup contact, racial attitudes, and public policy. I introduce a novel state-level measure of interracial exposure between white and African American populations and analyze how variation in exposure is associated with differences in state welfare generosity. Welfare generosity is measured using cash benefit limits under the Temporary Assistance to Needy Families program and Medicaid spending on mental health services. The results indicate that, in most states, lower levels of segregation and greater interracial exposure are associated with more generous welfare policies, consistent with mechanisms of increased empathy toward economically disadvantaged African Americans. However, in states with relatively large African American populations—particularly in the Deep South—greater exposure is associated with less generous welfare policies, consistent with group-threat dynamics. These findings highlight how the spatial organization of race continues to shape welfare policy outcomes, underscoring the role of residential segregation in sustaining racialized policy attitudes and unequal social provision.