Cities bring together people of different backgrounds. Within this diversity, people sharing common characteristics are often found in close proximity to each other, and at the same time, separated from other social groups. Such a separation is also known as spatial segregation. There is no unique answer to the question of why segregation exists, as it is the outcome of a process that can involve preferences, as well as the availability of affordable housing in certain areas. At the same time, segregation does not necessarily represent a problem to be solved, as people that seek proximity to their own may do so precisely because there are benefits for them. In some instances, however, these positive effects can be outweighed by negative effects related to uneven access to opportunities and lack of diversity. Sustained exposure to concentrations of disadvantage at work, school and other domains have been found to affect individual outcomes, leading to vicious circles of disadvantage.

This report advances previous knowledge on how inequality plays out across city neighbourhoods by considering multiple cities in an international context. The report compares segregation levels to understand the extent of intra-country and inter-country differences. It also considers possible drivers of intra-urban inequalities, including housing type choices, urban size and productivity, and the consequences of unequal access to economic opportunities.

The concentration of people in particular neighbourhoods according to their socio-economic characteristics is a feature present across cities around the world to different degrees. A comparison across a sample of cities from ten OECD countries plus Brazil and South Africa reveals that income segregation levels vary considerably across cities, even within a country. For instance, in Canada, the United Kingdom and the United States, income segregation in the most segregated city is at least twice as high compared to the least segregated city.

Moreover, the extent to which households concentrate in specific neighbourhoods tends to increase with their income levels. In most of the countries considered, segregation was found to be highest at the top of the income distribution. In South Africa − the most extreme case − the rich are three times more segregated than the poor. The situation is the opposite in Denmark and the Netherlands, two countries with low income inequality levels, where the poor tend to be more segregated on average than the rich.

Income segregation levels tend to be higher in more affluent, more unequal, larger, more productive and younger cities; and also in cities with a high concentration of people and jobs around a unique centre. As an example, average income segregation in cities in the top 25% of income is more than double than in cities in the bottom 25%. Nevertheless, while the same determinants of average segregation seem to explain the segregation of the top income groups, not all of them apply for the segregation of the poor.

The type of housing where people of different income levels live can be associated to observed levels of segregation. In Brazil, whole neighbourhoods with only apartment buildings – or so-called vertical neighbourhoods – tend to emerge as cities get larger. Across cities, a high concentration of affluent people in these vertical neighbourhoods is found to be associated with higher levels of income segregation. In Brazilian cities, the existence of areas almost exclusively dedicated to high-rise housing catering to the demands of higher-income groups can be at the basis of the observed income segregation.

Migrant background is another dimension which has become increasingly relevant in the study of intra-urban disparities in OECD countries. The comparison of the residential distribution of migrants in eight EU member states reveals that migrants not only concentrate in large metropolises, but also in small-size cities. In large cities (above 1 million inhabitants), 15% of residents are foreign-born on average and 9% of which come from outside the EU. The proportion of migrants in the total population in small cities (below 150 000 inhabitants) is smaller (9%), but some small cities in Europe are real magnets for migrants: four cities in the top five ranking in terms of share of foreign-born population are small cities. At the same time, migrant diversity – in terms of number of countries of origin and the distribution of migrants within cities – is an attribute of both large cities and small towns.

The concentration of lower-income and minority groups is deemed particularly problematic when it leads to worse economic outcomes. Evidence from cities in the Netherlands shows that a 1% increase in the share of migrants is associated to a 0.32% increase in the share of poverty. A related factor connecting intra-city location and outcomes is access to public infrastructure, particularly public transport. In the United States, lack of public transport connections between minority neighbourhoods and employment centres hinders job opportunities for residents of these neighbourhoods. A small difference of 1 percentage point higher share of non-white residents in US cities can translate into 18 more jobs available within a 30-minute commute on public transport. This can widen gaps in unemployment.

Policies can actively help to bridge divides for more equal and inclusive cities. As different dimensions of intra-urban inequality are strongly interlinked, making a city more inclusive requires a co ordinated effort between different strands of policy that matter at city level, such as access to services, housing and spatial planning. Affordable housing should be made available through inclusive land-use regulations and suitable social housing systems.

Policy makers can contribute to building more inclusive cities by:

• Making neighbourhoods more inclusive, for instance by creating places for interactions and new housing solutions that are both affordable and attractive for different groups.

• Broadening opportunities available for people lacking access to high-quality education and training by co ordinating local and national policies to ensure adequate provision across neighbourhoods.

• Better linking the most disadvantaged neighbourhoods with places of opportunity within cities through transport policies that better connect employment and residential locations where needed.

The design of policies to tackle intra-urban inequalities should take into account the right scale. An internationally comparable definition of cities, neighbourhoods and of the units used as building blocks for quantitative assessment of inequalities ensures consistency and sound comparisons of performance. The increasing availability of fine-scale urban data opens the possibility to analyse further the different forms that inequalities in cities can take, such as in terms of health, housing quality or education and their possible implications.