The gap between the wealthy and the less fortunate in urban areas of Europe and the United States is so wide that the wealthy residents reap the majority of the benefits from the advantages of living in a big city, while many others receive little to no benefit.
Research from Linköping University shows that the higher outputs from larger cities are often highly dependent on the extreme outcomes of the relative few who are very successful.
Size matters
Recently, experts from various fields have discovered consistent patterns between the size of cities and their economic activity. Larger cities tend to have more connections, wealth, and innovations per resident. However, it’s important to note that while this may be true for city populations as a whole, it may not apply to every individual resident.
“The higher-than-expected economic outputs of larger cities critically depend on the extreme outcomes of the successful few. Ignoring this dependency, policymakers risk overestimating the stability of urban growth, particularly in the light of the high spatial mobility among urban elites and their movement to where the money is,” the researchers explain.
They examined detailed location-based data on social interactions and economic output in Sweden, Russia, and the United States, and found that inequality in earnings, innovation, and urban connections is widespread.
They found that an individual’s productivity is influenced by the local social networks they are a part of. In larger cities, with more diverse populations, skilled and specialized individuals are more likely to find others whose skills complement their own, leading to higher productivity and more learning opportunities.
Unequal access
However, not everyone has equal access to these productive social environments, leading to inequality. The researchers followed the careers of 1.4 million Swedish wage earners over time and found that those who were initially successful in large cities had much more upward mobility than those who were successful in smaller cities.
Additionally, the study found that the most successful individuals in smaller cities were more likely to leave for larger cities, further exacerbating inequality between cities. The study highlights the need for policies that address the sustainability of urban life in the face of rising inequality.
“Urban science has largely focused on city averages. The established approach just looked at one data point per city, for example, average income. With their focus on averages, prior studies overlooked the stark inequalities that exist within cities when making predictions about how urban growth affects the life experiences of city dwellers,” the researchers explain.
The study highlights the issue of urban inequality, where many city residents are excluded from the economic benefits that come with living in a larger city. These individuals may not experience the same advantages as the urban elite, and when taking into account the higher cost of living in big cities, may even be worse off than their counterparts in smaller places.
