December 2015

IZA DP No. 9603: Socio-Economic Segregation in European Capital Cities: Increasing Separation between Poor and Rich

Socio-economic inequality is on the rise in major European cities as are the worries about that, since this development is seen as threatening social cohesion and stability. Surprisingly, relatively little is known about the spatial dimensions of rising socioeconomic inequality. This paper builds on a study of socio-economic segregation in twelve European cities: Amsterdam, Athens, Budapest, London, Madrid, Oslo, Prague, Riga, Stockholm, Tallinn, Vienna, and Vilnius. Data are used from national censuses and registers for the years 2001 and 2011. The main conclusion is that socio-economic segregation in Europe has grown. This paper develops a rigorous multi-factor approach to understand segregation and links it to four underlying universal, partially overlapping, structural factors: social inequalities, globalization and economic restructuring, welfare regimes, and housing systems. The paper provides an in-depth discussion of these factors to come to a better understanding of the differences between the hypothesized and actual segregation levels measured. It is suggested that introducing time-lags between structural factors and segregation outcomes improve the theoretical model.