Neighborhood demographic polarization, or the extent to which a privileged population group outnumbers a deprived group, can affect health by influencing social dynamics. While using birth records from 2001 to 2013 in Massachusetts (n = 629,675), we estimated the effect of two demographic indices, racial residential polarization (RRP) and economic residential polarization (ERP), on birth weight outcomes, which are established predictors of the newborn’s future morbidity and mortality risk. Higher RRP and ERP was each associated with higher continuous birth weight and lower odds for low birth weight and small for gestational age, with evidence for effect modification by maternal race. On average, per interquartile range increase in RRP, the birth weight was 10.0 g (95% confidence interval: 8.0, 12.0) higher among babies born to white mothers versus 6.9 g (95% CI: 4.8, 9.0) higher among those born to black mothers. For ERP, it was 18.6 g (95% CI: 15.7, 21.5) higher among those that were born to white mothers versus 1.8 g (95% CI: −4.2, 7.8) higher among those born to black mothers. Racial and economic polarization towards more privileged groups was associated with healthier birth weight outcomes, with greater estimated effects in babies that were born to white mothers than those born to black mothers.