Chapter 1. Introduction

Ana I. Moreno-Monroy
Paolo Veneri

Cities are spaces of diversity where people of different backgrounds come together to share the benefits of proximity. In these diverse spaces, the daily experience of a given individual in terms of her contact with other socio-economic groups and her access to city services widely differs across people of different backgrounds. For some, their usual day-to-day social contact in their neighbourhood, workplace and leisure spaces can be confined to people that share roughly the same socio-economic characteristics, although the city they inhabit may be extremely diverse. Such separation is also known as spatial segregation.

Segregation as such is neither an accident nor necessarily a negative feature, as similar households are known to sort into similar neighbourhoods to maximise the benefits of contact with their social network and the type of access to quality services and amenities they value. At least, this is true for those living in the more affluent and higher quality neighbourhoods, which will likely have good education, health and other service provision. Nevertheless, with decreasing housing affordability in cities and policies that concentrate spatially the provision of social housing, lower income households may end up tied to neighbourhoods with characteristics that affect their present and future well-being. At the individual level, research has shown that the spatial concentration of disadvantage has a negative effect on educational and work outcomes. At the city level, higher levels of segregation can lower social cohesion by amplifying provision gaps across high and low income areas.

The relationship between segregation and economic outcomes can be understood as a story of vicious circles at the level of individuals and households, between generations and within urban regions. Vicious circles of sustained exposure to concentrations of disadvantage lead to segregation, and segregation leads to more inequality and disadvantage. In an unequal city, a low income household will likely live in a deprived neighbourhood. Deprivation in turn can impact school and work outcomes of children and adults, further deepening inequalities, even across generations.

If cities are to perform their role as spaces for socioeconomic mobility, the local socioeconomic divisions that shape how benefits of life and work in cities are distributed over inhabitants should be better understood. This report contributes to this effort by focusing on three dimensions of intra-urban divides: income, migrant background and access to services.

Income divide

The geographical concentration of people with a similar income level, known as income segregation, increasingly shapes how people live their lives within cities. Income segregation is intrinsically linked to urban development. As people choose a place to live, subject to their resource constraints, they often gravitate towards locations where similar people in terms of culture and socio-economic background live. Amongst these, income is usually found to be a relevant characteristic to describe the clustering of people in different neighbourhoods. Income is also highly related to other relevant personal and household characteristics, such as educational level and preference for certain amenities and housing types.

Are income segregation levels similar across and within countries?

City-level measures of income segregation that are internationally comparable allow a broadening of the debate on how income segregation and public policies relate. However, is it right to compare income segregation levels across cities within the same country and even between different countries? For inter-city and inter-country comparisons to be meaningful, income segregation in cities should be investigated by looking at the distributions of income across income-classes and local areas, in a granular way. This granularity is important because spatial scale is crucial in the analysis of segregation.

Although income inequality and income segregation often go hand-in-hand, a city with low overall inequality may display higher income segregation levels than a city with high overall inequality. This can happen for two reasons. First, as segregation levels vary with income level, average income segregation values may hide large disparities at the top and bottom of the income distribution. Second, cities come in various shapes and sizes, and so do their neighbourhoods. Comparable income segregation measures should then consider a fine grid pattern which can be then aggregated to same-sized ‘neighbourhood’ areas.

Once a meaningful measure of income segregation has been constructed, it is worth exploring whether income segregation levels significantly differ across and within countries. The evidence in this report for cities in ten OECD countries plus Brazil and South Africa reveals substantial variation on average income segregation levels across countries. Country-level averages show that income segregation is highest in Brazil, South Africa and the United States, three countries with histories of segregation; and lowest in cities in countries with low levels of overall inequality, such as Australia, Denmark, the Netherlands and New Zealand.

At the city level, an international comparison reveals striking differences in average income segregation levels. In the most extreme case, average income segregation levels in Brasilia, the most segregated city in Brazil, are seven times higher than in Auckland, the most segregated city in New Zealand. These differences are more nuanced across developed countries with low overall levels of inequality, such as Australia, Denmark and the Netherlands.

Segregation also varies within countries, the more so for countries with higher average levels of income segregation. In the United States, for instance, average income segregation levels in Memphis, the most segregated city, are twice as high as in Portland, the least segregated city.

Are the poor and the rich equally likely to be segregated?

Income segregation levels vary considerably across income groups. Usually, the top and bottom income groups are found to be more likely to experience higher levels of segregation than households in the middle of the income distribution. In this case, a plot of income percentiles against segregation levels displays a U-shaped form.

In many cities in the twelve countries considered, including the United States, segregation was found to be highest for the top income group. Segregation levels usually pick up after a certain income level threshold is reached. In all countries, households in the middle of the income group – which are also the most numerous – display the lowest levels of segregation.

In what kind of cities are the rich and the poor more likely to live separated?

Relatively higher average income segregation levels can be expected in more unequal, more affluent, larger, younger and more productive cities. The way in which population and jobs are distributed within the city also matters for segregation: high concentration of jobs and population around a unique center is associated with higher levels of income segregation. However, most of these determinants speak mostly to segregation of the top income groups.

Governance structures at the city level may also matter for income segregation. The organisation of the tax system at the local level might introduce incentives to households to concentrate in different neighbourhoods, with possible consequences on segregation levels. In France, income segregation levels were on average lower in metropolitan areas with less unequal housing tax arrangements across the different municipalities.

Higher levels of segregation of affluence are related to less exposure of apartment building dwellers to others

Across one hundred cities ranging from small cities of hundred thousand inhabitants to megacities such as São Paulo and Rio de Janeiro, segregation levels were found to be higher in larger cities and to increase sharply at the higher end of the income distribution.

Housing choices may be behind this pattern. In Brazil, whole neighbourhoods with only apartment buildings are more likely to arise as cities get larger. In some “vertical neighbourhoods” in Rio de Janeiro where more than 95% of households reside in apartment buildings, 30% of households earn 15 minimum wages or more while 2% earn one minimum wage or less.

The concentration of affluent people in these vertical neighbourhoods is linked to the observed segregation of affluence across cities in Brazil. Controlling for city size and overall level of inequality, a lower exposure of apartment dwellers to other types of dwellers is related to higher segregation of the affluent. Vertical neighbourhoods are not, however, related to the segregation of the poor, which is not surprising since apartment buildings are not the prevalent type of housing for low income people in Brazil.

Migrant divide

The location of people sharing a common country of origin across neighbourhoods in OECD cities has become increasingly important in understanding how migrant communities integrate into new urban settings.

The analysis of migrant settlement patterns has been traditionally focused on aggregated spatial scales, such as the municipal or regional level. At these levels, studies usually indicate that migrants gravitate towards large cities. However, the comparison of the residential distribution of immigrants in eight European countries using a detailed map of immigrant populations reveals a more nuanced picture.

Do migrants from all origins concentrate in small and large cities alike?

Although there is a general tendency of migrants to gravitate toward large cities, a relatively large share of migrants can also be found in some small cities. The likelihood that a migrant settles in a small city instead of a large one is attached to country of origin. The relationship between city size and migrant concentration is smaller for migrants from EU countries compared to migrants from outside the European Union. On the other hand, in the eight European countries analysed, the association between city size and non-EU migrant concentration is positive, although it is stronger in the Netherlands, Portugal and the United Kingdom and weaker in Italy.

At the same time, migrant diversity – measured in terms of number of countries of origin and the distribution of migrants within cities – is an attribute of both large cities such as London or Paris, and small towns such as Barazante in Italy and Monaghan in Ireland.

What factors contribute to a higher likelihood of isolation and spatial separation of migrants in cities?

Segregation can be related to two different dimensions: clustering and isolation. Clustering is related to the degree of concentration of distinct socio-economic group across neighbourhoods. In turn, isolation is related to how unlikely it is for a member of a group to meet a member of another group.

These two dimensions do not necessarily move in the same direction nor are related to the same factors. For instance, members of a large migrant community settled in different neighbourhoods in a large city can appear to be more isolated because they are less likely to encounter someone from another community. At the same time, they may appear less clustered as they live in several neighbourhoods within the city. As a matter of fact, across cities in the eight EU countries analysed, community size is positively related to isolation and negatively related to clustering.

Is there a link between the spatial concentration of migrants and urban poverty?

Evidence for sixteen cities in France and five cities in the Netherlands indicates that cities with a higher number of migrants as a percentage of the total population also display higher levels of segregation for the bottom 20% income group. More detailed evidence for five Dutch cities, confirms that neighbourhoods characterised by a large share of migrants show significantly higher levels of poverty, measured as the share of persons in the bottom income quintile at a fine-grained scale. Even according to the most conservative estimates, a 1% increase in the share of migrants is associated to a 0.32% increase in the share of poverty.

Access divide

An important factor connecting intra-city location and economic outcomes is access to public infrastructure, particularly public transport. The number of jobs that a person can reach within a certain commuting threshold captures how unequally distributed opportunities are within cities. The level of accessibility to jobs depends on both the relative distribution of jobs – that is, how concentrated or dispersed they are spatially – and also on the level of provision of public transit options across neighbourhoods.

Accessibility to jobs by public transport varies widely across and within cities

Absolute differences across one hundred US cities are stark. While in New York (NY) 44 jobs per person can be accessed within a 30 minute public transit commute, in Riverside (CA) only 1 job per person can be accessed. In fact, residents in 40 out of 46 cities have access to less than 10 jobs within a 30 minute transit commute.

Inequality in access to jobs is also large within cities: although on average residents from New York City have high access to jobs by public transit, accessibility from individual neighbourhoods varies considerably within the city. Across cities the Gini index for average number of jobs per capita that are available from a city census tract within a 30-minute commute by public transit varies from 0.5 in San José (California) to 0.83 in New York City.

Lack of transport connections between minority neighbourhoods and relevant employment centres hinders job opportunities

The concentration of lower income people and minorities in particular neighbourhoods within cities is deemed particularly problematic when it leads to worse economic outcomes.

Evidence has shown that in the United States intra-city location is linked to worse economic outcomes when areas lack appropriate public transit connections to jobs. In the United States, lack of transit connections between minority neighbourhoods and jobs seems to hinder job opportunities for residents of certain neighbourhoods, leading to more inequality in job outcomes. In fact, there is a strong association of workplace segregation along racial lines with inequality in job accessibility by transit.

Do minorities face constrained access to job opportunities by public transport because of their neighbourhood location?

Although in the United States minorities live in inner city areas that are relatively well-served by transit, the jobs available to them often lack appropriate transit connections. The concept of workplace segregation along racial lines describes the extent to which workers of different races work in the same or in different areas within a city. This is analogous to residential segregation: a city is segregated if residents of different races live mostly in different neighbourhoods. In fact, high levels of workplace segregation often go hand in hand with higher levels of residential segregation.

Jobs available to minorities are relatively less well served by public transit. As an example, in two neighbourhoods that differ by their share of non-white residents by 1%, each resident of the neighbourhood with the lower minority rate has access to 18 more jobs within a 30-minute commute on public transit than residents of the other neighbourhood. What's more: this holds only in cities where workers of different races work in different areas of the city.

Breaking divides

Current urban inequality levels call for policies for more inclusive cities. There is no simple answer to the question of why segregation exists, as it is the outcome of a process that can involve preferences, limitations in housing availability, and housing policies explicitly directing the location of specific socio-economic groups. For the same reason, policies should not be concerned with lowering average segregation levels, but with bridging the underlying divides that widen inequalities in access for disadvantageous groups.

What can policies do to break vicious circles of inequality?

The multi-dimensional nature of segregation calls for co-ordinated policies at the city level. Policy measures to increase access to services, housing and spatial planning should be designed in a more co-ordinated manner.

Policies to fight intra-urban inequalities should be designed at the right scale. A necessary step in this direction is the use of a comparable definition of functional urban areas, so that not only city cores but also their commuting zones in the suburbs are consistently included. The neighbourhood scale, which is usually the basis for segregation measures, should also be as homogenous as possible for comparisons to be meaningful.

To tackle intra-urban inequalities, policy makers can also contribute to more inclusive cities with planning initiatives to bridge access gaps in specific neighbourhoods. These initiatives can reinforce policies aiming to increase access to high-quality education and employment opportunities for all.