Why did ghettos "go bad"?

In 1990 and 2000, residential segregation was associated with poor economic outcomes for African-Americans. Earlier in the century, the opposite was true. The economic deterioration of African-American enclaves has been attributed either to the departure of the black middle class or to the decline in centrally-located jobs. Postal employment -- well-paid work that has, for largely exogenous reasons, remained in central cities -- is a useful test case to distinguish between these explanations. Black postal employment is unrelated to segregation before 1960, when middle class role models, including a large contingent of postal employees, were close at hand. From 1960 onward, as other employment opportunities disappeared, blacks in segregated cities were more likely to work for the postal service (relative to whites in their area). This relationship is true only for postal clerks, many of whom work at centralized processing plants, not for mail carriers who work throughout the metropolitan area. We interpret this pattern as broadly consistent with the importance of job availability for the economic health of black neighborhoods.