This chapter examines the relationship between economic growth and inclusion, tracing how economic thought has evolved from first linking the two to increasingly treating them as largely separate objectives in late 20th century policy. More recent approaches seek to again reconcile these two goals, recognising that sustained economic prosperity depends on broad-based opportunities and outcomes. Inclusive growth challenges are often particularly acute in cities, which act as engines of economic growth in countries, while also concentrating persistent inequalities. This chapter highlights the socio-economic costs of failing to pursue inclusive growth, as well as the economic and social benefits it can generate for cities.
What Works for Inclusive Growth in Cities
Abstract
Inclusive growth represents a shift in economic thinking which positions broad-based prosperity and economic efficiency as mutually reinforcing forces, rather than separate or competing objectives.
Cities are both engines of growth and places where deep, multidimensional inequalities are found. Inequalities in income, housing and access to opportunity vary significantly across and within cities, with some places and populations consistently left behind.
Failing to foster inclusive growth in cities carries significant social and economic costs. It constrains productivity and labour supply through gaps in education, skills and health. Inequalities can drive social unrest that deters investment and undermines competitiveness, creating systemic risks that weigh on long-term economic performance.
The costs of inaction can compound over time. Inequalities in education, housing and access to opportunity reinforce one another across generations, entrenching disadvantage.
Conversely, inclusive growth builds resilience to economic and social shocks, improves job quality and provides the opportunity for cities to leverage local strengths and address place-specific challenges.
For cities, inclusive growth begins with a strategic choice to treat access to opportunity among the drivers of growth, not simply a byproduct of it. This means explicitly integrating access to opportunity into economic strategies from the outset, rather than retrofitting them.
From growth first to inclusive growth: a shift in economic thinking
The question of how wealth is distributed, alongside the overall size of the economy, has long been central to economic thought. Early economic thinkers, such as Adam Smith (1723-1790), John Stuart Mill (1806‑1873) and Alfred Marshall (1842-1924), each acknowledged, albeit in different ways, that economic growth should be a means to improving societal well-being and living standards, rather than an end in itself (Samans, 2024[1]). However, by the late 20th century, policy debate increasingly prioritised economic efficiency and growth over living standards. The shift towards neoliberalism, associated with economists like Ludwig von Mises (1881-1973), Friedrich Hayek (1899-1992) and Milton Friedman (1912-2006), relied on the assumption that wealth generated at the top would eventually “trickle down” to the rest of society, addressing inequalities.
Recent evidence from European Union (EU) cities challenges the assumption of “trickle-down” models. Analysis across more than 600 cities finds that strong gross domestic product (GDP) and productivity growth are not automatically associated with improved inclusion outcomes. Cities with high levels of economic dynamism, that are often large, growing and specialised in advanced services or with diversified economies, do not consistently experience reductions in poverty or inequality. This suggests that the link between growth and greater inclusion is not automatic, but rather it depends on how growth is structured and distributed (see further details in Chapter 2: Context matters).
The emergence of inclusive growth and related frameworks
The concept of inclusive growth emerged in the early 2000s as a direct response to the shortcomings of traditional trickle-down models. Earlier frameworks like pro-poor growth, economic growth where a larger share of benefits go to the poorest (Kakwani and Pernia, 2000[2]), and sustainable development (Parris and Kates, 2003[3]) set the stage for an approach that integrates economic and social policies.
Inclusive growth posits that equal access to opportunity and economic expansion can be mutually reinforcing and that, over the long term, equity is fundamental for sustainable prosperity (de Mello and Dutz, 2012[4]). It is defined as economic growth that is distributed fairly across society and creates opportunities for all (Boarini, Murtin and Schreyer, 2015[5]). This approach not only addresses wealth concentration and shifts in income from labour to capital (as highlighted by Piketty (2014[6])) but also explicitly targets discrimination, social exclusion and poverty – core concerns underpinning the European Pillar of Social Rights. By tackling these structural changes, inclusive growth seeks to foster a society where economic and social prosperity are mutually reinforcing, recognising that a reduction in inequalities and broader participation and access to opportunities can act as drivers of stronger and more sustainable economic growth, including by enhancing human capital, labour utilisation and productivity (OECD, 2016[7]).
In parallel, other theoretical frameworks have enriched the debate on inclusive growth and seek to address shortcomings in traditional growth models. For instance, inclusive capitalism and inclusive productivity focus on boosting productivity, growth and wages while ensuring more equitable outcomes (Cho et al., 2024[8]). The World Bank’s “shared prosperity” concept, introduced in 2014, measures the income of the bottom 40% of a country’s population and emphasises the need to lift the most vulnerable (World Bank, 2014[9]). Similarly, international efforts to move “beyond GDP” highlight the importance of measuring well‑being, sustainability and the distribution of outcomes alongside economic output (Stiglitz, Fitoussi and Durand, 2018[10]). More recently, the concept of human-centred economics calls for reorienting economic systems towards improving living standards and well-being, rather than focusing solely on GDP growth. The concept proposes that the living standards of the median household should receive at least as much policy attention as the overall wealth, or productive output, of an economy (Samans, 2024[1]).
At the same time, growing concerns about the environmental and social externalities of traditional growth models have led to the emergence of concepts such as green growth, post-growth and degrowth. Green growth seeks to reconcile economic expansion with environmental sustainability, while degrowth challenges the notion of growth itself, advocating for a reduction in resource consumption and shift towards equitable well-being (Hickel, 2020[11]; Kallis, Kerschner and Martinez-Alier, 2012[12]). These concepts, while differing in their approaches, share a common emphasis on equity, sustainability and the need to address systemic inequalities.
These debates highlight the risks associated with pursuing either growth or inclusion in isolation. Growth strategies that fail to broaden access to opportunities can deepen social and spatial inequalities, weaken trust in institutions and create social discontent. At the same time, approaches focused solely on redistribution can lead to zero-sum games where efforts become unsustainable due to economic discontent among groups that feel opportunities are being taken away from them (Rodríguez-Pose, Terrero-Dávila and Lee, 2023[13]). In regions that have experienced prolonged stagnation, efforts to foster inclusion without a strategy for economic renewal can fuel resentment, reinforcing perceptions of unfairness and deepening divisions (Rodríguez-Pose, 2018[14]), undermining measures to reduce inequality (see more details on cost of inaction below).
The OECD has worked on inclusive growth since the 2010s through initiatives and analytical frameworks aimed at understanding how economic growth can better translate into improved well-being and opportunities for all.
Early work, including the Inclusive Growth Initiative (de Mello and Dutz, 2012[4]) examined the relationship between inequality and economic performance and highlighted the role of equal opportunities in supporting long-term prosperity. The OECD subsequently expanded this work at the city level through the OECD Champion Mayors for Inclusive Growth Initiative (OECD, 2016[15]), a global coalition of city leaders committed to tackling inequality and promoting more inclusive urban development.
The OECD has also produced a range of reports examining inclusive growth challenges and responses at the city level, including Making Cities Work for All (OECD, 2016[7]) and Divided Cities (OECD, 2018[16]). More recently, the OECD’s work on sustainable and inclusive productivity growth (Cho et al., 2024[8]) provides guidance for policymakers to co‑ordinate action on boosting productivity growth – core to long-term progress on wages and economic prosperity and therefore on inclusive growth.
The OECD well-being framework has also contributed to the broader debate by moving beyond GDP‑based measures to capture broader social, economic and environmental dimensions of progress and provide a more comprehensive assessment of societal well-being (OECD, 2020[17]).
Sources: de Mello, L. and M. Dutz (eds.) (2012[4]), Promoting Inclusive Growth: Challenges and Policies, https://doi.org/10.1787/9789264168305-en; OECD (2016[15]), Paris Action Plan for Inclusive Growth in Cities, https://www.oecd.org/content/dam/oecd/en/about/programmes/cfe/oecd-champion-mayors-for-inclusive-growth/Paris-Action-Plan.pdf; OECD (2016[7]), Making Cities Work for All: Data and Actions for Inclusive Growth, https://doi.org/10.1787/9789264263260-en; OECD (2018[16]), Divided Cities: Understanding Intra-urban Inequalities, https://doi.org/10.1787/9789264300385-en; Cho, W. et al. (2024[8]), “Diagnosis and policy action for sustainable and inclusive productivity growth”, https://doi.org/10.1787/1668f250-en; OECD (2020[17]), How’s Life? 2020: Measuring Well-being, https://doi.org/10.1787/9870c393-en.
Comparing models of growth and development
To better understand the relationships between concepts of growth, Table 1.1 compares the core principles and objectives of inclusive growth with examples of other models of economic development. While not exhaustive, the comparison highlights where concepts converge and diverge, illustrating the trade-offs and synergies in adopting specific or hybrid models for growth and development. For instance, while green growth and degrowth share aims of environmental sustainability, there are tensions between green growth’s aim of economic expansion, while degrowth advocates to reduce economic activity.
A central distinction across these models concerns the role of economic growth itself. For example, while both green growth and degrowth prioritise environmental sustainability, they diverge fundamentally in their assumption: green growth seeks to sustain economic expansion through decoupling emissions whereas degrowth calls for a reduction in material use and, in some contexts, economic activity more broadly. Similarly, post-growth frameworks question the primacy of GDP as a policy objective while approaches such as trickle-down economics or shared prosperity remain anchored in growth-led paradigms, differing in how the benefits of growth are distributed. Understanding these differences is important: cities and national governments often adopt hybrid approaches in practice, combining elements from multiple frameworks depending on local priorities, constraints and development objectives.
Sources: Arndt, H. (1983[18]), “The ’Trickle-Down’ Myth”, https://www.journals.uchicago.edu/doi/pdf/10.1086/451369; OECD (2015[19]), All on Board: Making Inclusive Growth Happen, https://doi.org/10.1787/9789264218512-en; OECD (2016[7]), Making Cities Work for All: Data and Actions for Inclusive Growth, https://doi.org/10.1787/9789264263260-en; Belmonte-Ureña, L. et al. (2021[20]), “Circular economy, degrowth and green growth as pathways for research on sustainable development goals: A global analysis and future agenda”, https://doi.org/10.1016/j.ecolecon.2021.107050; Savini, F. (2024[21]), “Post-Growth, Degrowth, the Doughnut, and Circular Economy: A Short Guide for Policymakers”, https://doi.org/10.3138/jccpe-2023-0004.
Cities are engines of economic growth but also concentrate inequality
Cities illustrate the potential tensions between economic efficiency and equity. As engines of regional and national economic growth, cities account for over 80% of global GDP, while being home to around half the world’s population (OECD/UN-Habitat, 2024[22]). Across 30 OECD countries,1 large and mid-sized cities accounted for 61% of the total population while generating 67% of total GDP in 2013 and 73% of GDP growth between 2013 and 2021 (OECD, forthcoming[23]). Yet, despite their central role in driving productivity and competitiveness, cities tend to exhibit higher levels of income inequality than the national average. In fact, income inequality, measured by the Gini coefficient – a common measure of income inequality, where 0 is perfect equality and 1 is perfect inequality – is not only higher in cities than in other areas, but also tends to increase with city size (Castells‐Quintana, Royuela and Veneri, 2020[24]). Higher income inequality in capital city regions compared to the national average illustrates this divide (Figure 1.1). Considering EU countries, income inequality is higher than the national average in 14 of 18 capital regions for which data are available.
Gini coefficient, 2022 or latest year available
Note: In 17 of 24 countries where data were available.
Source: OECD (n.d.[25]), OECD Regions, cities and local areas database (Income inequalities - Regions), http://oe.cd/geostats.
Inequalities between cities: divergence and “left-behind” places
Economic and social inequalities exist both between and within cities. Between cities, spatial disparities in income and economic opportunities can mean residents of underperforming areas perceive they have been undervalued and left behind by globalisation, automation or shifts in industrial policy (McCann, 2019[26]). Underperforming areas and “left behindness” can contribute to a spiral of economic stagnation and population decline, particularly as young people migrate to more prosperous cities in search of better prospects (Fiorentino et al., 2024[27]). This, in turn, exacerbates demographic imbalances and social discontent.
Inequalities within cities: access, opportunities and outcomes
Within cities, inequality can take many forms, from unequal access to economic opportunities, quality housing, public transport and services, to disparities in environmental amenities. These inequalities can lead to disparities across monetary and non-monetary outcomes. Among these, income inequality is of particular importance, as it intersects with and reinforces other inequalities, especially those in health and overall well-being.
A key driver of income inequality within cities is the polarisation of economic opportunities. For example, large cities often power national economies through agglomeration economies and knowledge-based, high-skilled industries. At the same time, their economic structures can reinforce and exacerbate socio‑economic divides. While these cities are home to high-value jobs in sectors such as finance, law or technology services, they also create demand for low‑pay service jobs, such as baristas, cleaners or delivery workers, whose earnings are significantly lower (Cucca and Ranci, 2016[28]).
Labour market inequalities are further shaped by differences in job quality and economic security. In many cities, labour market flexibilisation and the expansion of the gig economy have increased the prevalence of insecure forms of work, particularly in sectors such as food delivery, retail and personal services (more details on trends in non-standard forms of work can be found in Chapter 2) (Montgomery and Baglioni, 2022[29]; Chacaltana and Dasgupta, 2021[30]). While these jobs can provide flexibility and entry points into the labour market, they are often characterised by lower wages, unstable incomes, limited social protection and fewer opportunities for career progression. Research suggests these such forms of employment can trap workers in low-wage and insecure jobs, limiting both social mobility and economic resilience. Emerging evidence also points to broader well-being impacts. A study of over 90 000 American workers found that individuals holding multiple jobs spent less on both essential and discretionary goods and reported lower levels of financial satisfaction, mental health and overall job satisfaction than equivalently paid single-job earners (Tsai and Buell, 2025[31]).
Beyond labour market dynamics, other factors can contribute to inequalities in cities. The higher cost of living in cities compared to rural areas, particularly for housing and essential services, disproportionately affects lower-income residents, as well as the “squeezed middle class”, limiting discretionary saving or spending power and reducing opportunities for upward economic mobility (OECD, 2021[32]). Urbanisation and gentrification can push vulnerable groups to the periphery of cities, reinforcing spatial segregation, exacerbating environmental inequalities by increasing their reliance on private cars and reducing access to jobs, healthcare and education (Hochstenback, 2017[33]).
Compared to rural and suburban areas, cities tend to attract a larger share of youth and students and people with a migrant background than other regions (OECD, 2025[34]). These groups can face greater barriers to economic mobility and be most vulnerable to ongoing labour market transitions (OECD, 2023[35]). For instance, young people entering the job market often encounter challenges such as temporary contracts, unpaid internships or a mismatch between their skills and available opportunities alongside the significant challenge of accessing affordable and quality housing (Eurofound, 2021[36]). Meanwhile, people with a migrant background are more likely to experience labour market discrimination, lower wages and restricted access to social protection systems, further exacerbating inequality in cities (Mohammadi, 2024[37]; ILO, 2021[38]).
Multidimensional inequalities in cities
Inequalities in cities are multidimensional, extending beyond income, to encompass social outcomes such as life expectancy, access to key amenities and employment opportunities. For example, low-income areas are often more exposed to environmental risks such as extreme heat and air pollution. A study of urban areas in France found that in cities such as Lyon, where wealthier households tend to reside in affluent suburbs, exposure to urban heat islands decreases as income rises (Figure 1.2) (Grislain-Letrémy, Sixou and Sotura, 2024[39]). Similarly, research on air quality disparities in United States (US) cities indicates that both household income and ethnic background influence exposure to air pollution, with lower income and ethnic minority households experiencing poorer health outcomes. Compared to the general population, low‑income, ethnic minority households were 28% more exposed to nitrogen dioxide than high-income white households, with much greater disparities observed in some larger cities in the United States (Demetillo et al., 2021[40]).
The interconnected nature of multidimensional inequalities is also evident in housing dynamics. Rising house prices contribute to the displacement of lower-income and increasingly middle-income residents, including key workers for strategic sectors and services, to more affordable areas, often with fewer amenities and poorer local environments, while wealthier populations locate in well-serviced districts with better health outcomes (Bennett et al., 2023[41]). The housing crisis can also mean key workers, such as teachers, nurses or municipal employees, can face high travel costs or long commutes threatening the effective delivery of public services, as they are being outpriced from living near their workplaces.
Note: The grey borders represent all the city’s municipalities. Map A represents the UHI index in degree Celsius difference relative to the surrounding countryside. Map B represents the household average income in euros per consumption unit at the municipal level. Data dissemination rules to protect household confidentiality only allow for displaying income for municipalities with more than 5 000 inhabitants. This explains the municipalities greyed out in Map B.
Source: Grislain‑Letrémy, C., J. Sixou and A. Sotura (2025[42]), “Urban Heat Islands and Inequalities: Evidence from French Cities”, https://www.banque-france.fr/en/publications-and-statistics/publications/urban-heat-islands-and-inequalities-evidence-french-cities.
These multidimensional inequalities also have strong intergenerational dimensions, reinforcing the cycle of poverty and discrimination in cities. Socio‑economic background remains a strong predictor of educational outcomes, with access to high-quality, inclusive education continuing to be unequal in many urban settings (European Commission, 2024[43]). Children growing up in disadvantaged households often face barriers which begin early and accumulate over time, such as under-resourced schools, more inexperienced teachers, few extracurricular activities and limited access to social mobility-enhancing networks (OECD, 2019[44]; OECD, 2025[45]). These disparities in education not only constrain individual life changes but can also perpetuate broader inequalities in health, employment and housing (find more details in Chapter 2 – Trends and drivers of inclusive growth in cities).
Environmental disparities can be both a cause and consequence of inequality within and between cities. In OECD functional urban areas (FUAs),2 about one in four residents are unable to access green space within a short walking distance (400 metres or less). EU urban centres tend to perform better, with typically fewer than one in eight residents unable to reach green spaces within a short walk. However, access remains uneven both between and within countries. In France or Norway for example, residents in lower‑income cities are significantly more likely to lack nearby green space (27% and 30% respectively), compared to just 14% and 11% in their high-income cities. In contrast, in Austria, Finland and Germany, green space access is uniformly high across cities, regardless of income level (Figure 1.3). These differences in environmental factors such as access to parks and recreational spaces can contribute to pronounced disparities in health outcomes across cities.
Share of population without access to a green area in mid-sized/large FUAs
Note: Percentage of population without access to a green area within 400 metres in urban centres of FUAs with 250 000 inhabitants or more. Green areas were extracted from OpenStreetMap and include parks, playgrounds, recreation grounds, village greens, nature reserves, gardens, zoos, cemeteries, graveyards, forests, woods, scrubs, heath, grassland and wetland.
Source: OECD (n.d.[46]), OECD Local Data Portal (database), https://www.oecd.org/en/data/tools/oecd-local-data-portal.html.
How inequality reduces productivity: human capital and health gaps
Failing to address inequalities can incur economic costs and diminish citizen welfare. Persistent inequality can slow economic growth. The average rise in inequality recorded in OECD countries between the 1980s and 2011 was roughly 3 Gini points in the Gini coefficient. EU countries with comparable data experienced a more modest rise in inequality, of around 1.6 Gini points over the same period (Solt, 2020[47]). Empirical analysis finds that a 3-point rise in the Gini coefficient is associated with a reduction in GDP per capita growth of 0.35 percentage points (p.p.) annually, leading to a cumulative loss of 8.5% over 25 years (Cingano, 2014[48]; Llena-Nozal, Martin and Murtin, 2019[49]).
One mechanism that reduces GDP per capita growth is inequality of educational outcomes. In the European Union socio-economically advantaged and disadvantaged students face a gap in educational underachievement3 of 37 p.p. (European Commission, 2024[43]). Children from low-income households are also more likely to face financial barriers to staying in education, resulting in a misallocation of talent and reduced overall productivity. Unequal access to education and employment opportunities is linked to lower productivity and economic inefficiency. In the EU, the gender employment gap alone was estimated to have a social cost of EUR 320 billion or 2% of GDP in 2021 (Eurofound, n.d.[50]).
Health inequalities further exacerbate economic inefficiency. Disparities in health outcomes across income groups are estimated to result in a welfare loss of 9.4% of GDP in the European Union (Mackenbach, Meerding and Kunst, 2010[51]). These losses underscore the negative externalities of inequality, such as lost productivity and higher social costs, which ultimately can weaken both the economic performance and social cohesion of cities.
Inequality as a driver of systemic economic risks
Beyond direct economic losses, extreme inequality can lead to social unrest, which in turn undermines investment, weakens competitiveness and reduces consumption. Research shows that a one standard deviation in the social unrest index (a measure based on reports in the media) reduces GDP by 0.2 p.p. over the following 1.5 year (Hadzi-Vaskov, Pienknagura and Ricci, 2023[52]). Spatial inequalities exacerbate these challenges, creating so-called “geographies of discontent” (McCann, 2019[26]; Rodríguez-Pose, Dijkstra and Poelman, 2024[53]). Over time this can lead to a widening gap between cities: while some cities pull ahead as engines of growth, deindustrialisation can cause others to experience development challenges due to job losses, declining public services and population shrinkage, exacerbating grievances. These economic disparities have been linked to rising discontent in the European Union, growing support for populist movements and high levels of mistrust in public institutions (Rodríguez-Pose, Dijkstra and Poelman, 2024[53]; De Ruyter, Martin and Tyler, 2021[54]).
Inclusive growth drives economic dynamism and social cohesion
At the macro level, inclusive growth policies have demonstrated their potential. For instance, it is estimated that the EU Cohesion Policy has contributed to measurable increases in GDP in countries where support has been focused, projecting gains for up to 8% in Croatia and around 6% in Poland and the Slovak Republic by 2030 (European Commission, 2024[55]). However, while national and regional disparities have narrowed, inequalities between territories mean that cities in less developed regions continue to face challenges in service provision, quality of life and risk of poverty, while within-city inequalities persist, affecting access to jobs, services and economic opportunities (European Commission, 2024[55]).
There are also significant benefits from pursuing inclusive growth in cities to create economically dynamic and socially cohesive communities. Research demonstrates that cities with more inclusive neighbourhoods, characterised by lower segregation, stronger social networks and better access to quality education foster higher economic mobility, particularly for disadvantaged groups (Chetty et al., 2022[56]). Social capital, or connectedness between economic groups, varies significantly across cities and regions, and more inclusive areas tend to achieve better economic outcomes. In particular, economic connectedness – measured through friendship between high- and low-income individuals – is one of the strongest predictors of economic mobility, highlighting the importance of mixed-income neighbourhoods in breaking cycles of poverty and driving growth (Chetty et al., 2022[56]). Conversely, barriers to inclusive growth such as economic and racial segregation can limit the development of social capital, restricting opportunities for upward mobility.
Inclusive growth underpins resilience to economic and social shocks
Inclusive growth can also strengthen cities’ response and resilience to economic shocks, public health crises and climate-related challenges. Evidence highlights how proactive government investment and local leadership in response to economic challenges can play a more important role in shaping long-term economic success than initial industry mix (Bartik, 2024[57]). For example, Grand Rapids, Michigan (the United States), a city that suffered from manufacturing decline, successfully redeveloped its economy by investing in advanced manufacturing clusters. These new industries built on the existing skills of the city’s labour market and were complemented by state investments in customised job training programmes (Bartik, 2018[58]). As a result, by 2016, manufacturing employment in Grand Rapids was 50% higher than if the city had followed post-1990 American trends. This example highlights how inclusive growth strategies, when rooted in local assets and supported by targeted interventions, can reverse economic decline and create sustainable pathways for prosperity.
A review of “turnaround cities”, i.e. places that have reversed long-term economic underperformance, such as Dortmund, Germany, Pittsburgh, United States or Bilbao, Spain, shows that those that successfully revitalised did so by integrating economic development strategies with policies that enhance quality of life. Such an approach reflects the growing recognition that quality of life is not just a social objective but a competitive factor, especially in the context of persistent skills shortages (Frick, 2023[59]). Similarly, economically prosperous and socially inclusive cities are better equipped to withstand and recover from disruptions, as diversified economies and cohesive communities provide stronger foundations for adaptation (OECD, 2024[60]). Cities that effectively harness inclusive growth by developing dynamic, innovative economies with a skilled labour force are better positioned to attract and retain both employers and employees, particularly when supported by high-quality public services, accessible housing and cultural vibrancy, as talent attraction increasingly depends not only on job opportunities, but on the broader liveability of a place.
Fostering quality of life through inclusive growth in cities is particularly relevant for providing citizens with the “right to stay” – the ability of individuals to remain in their local communities, rather than feeling compelled to relocate in order to thrive (Letta, 2024[61]). Indeed, inclusive growth can help cities not only attract but also retain residents by supporting equitable access to opportunities and services that support well-being and belonging. This can be achieved through policy instruments such as affordable housing, equitable access to public services and inclusive economic opportunities (see Chapter 3 for more details about the policies to drive inclusive growth in cities). In cities, both rapid economic growth and limited economic opportunities can undermine this right. For example, economic development and rejuvenation of an area can lead to gentrification, displacing existing residents, while a lack of opportunities can result in “brain drain”, compelling young or highly skilled workers to seek opportunities elsewhere. While all citizens benefit from the right to stay, young people and low- and middle-income groups, in particular, can gain most from the freedom to decide where to live and work. Moreover, fostering the right to stay can trigger a virtuous cycle of other inclusive growth benefits, arising from greater social cohesion, economic mobility and resilience.
References
[18] Arndt, H. (1983), “The ’Trickle-Down’ Myth”, Economic Development and Cultural Change, Vol. 32/1, https://www.journals.uchicago.edu/doi/pdf/10.1086/451369.
[57] Bartik, T. (2024), “Broadly Shared Local Economic Success Since 2000: New Measures and New Lessons for Communities”, W.E. Upjohn Institute for Employment Research, https://research.upjohn.org/reports/296/.
[58] Bartik, T. (2018), Helping Manufacturing-Intensive Communities: What Works?, https://www.cbpp.org/research/full-employment/helping-manufacturing-intensive-communities-what-works.
[20] Belmonte-Ureña, L. et al. (2021), “Circular economy, degrowth and green growth as pathways for research on sustainable development goals: A global analysis and future agenda”, Ecological Economics, Vol. 185, p. 107050, https://doi.org/10.1016/j.ecolecon.2021.107050.
[41] Bennett, J. et al. (2023), “Changes in life expectancy and house prices in London from 2002 to 2019: hyper-resolution spatiotemporal analysis of death registration and real estate data”, The Lancet Regional Health - Europe, Vol. 27, p. 100580, https://doi.org/10.1016/j.lanepe.2022.100580.
[5] Boarini, R., F. Murtin and P. Schreyer (2015), “Inclusive Growth: The OECD Measurement Framework”, OECD Statistics Working Papers, No. 2015/6, OECD Publishing, Paris, https://doi.org/10.1787/5jrqppxjqhg4-en.
[24] Castells‐Quintana, D., V. Royuela and P. Veneri (2020), “Inequality and city size: An analysis for OECD functional urban areas”, Papers in Regional Science, Vol. 99/4, pp. 1045-1065, https://doi.org/10.1111/pirs.12520.
[30] Chacaltana, J. and S. Dasgupta (2021), Is the future ready for youth?, International Labour Organization, https://www.ilo.org/publications/future-ready-youth.
[56] Chetty, R. et al. (2022), “Social capital I: measurement and associations with economic mobility”, Nature, Vol. 608/7921, pp. 108-121, https://doi.org/10.1038/s41586-022-04996-4.
[8] Cho, W. et al. (2024), “Diagnosis and policy action for sustainable and inclusive productivity growth”, OECD Science, Technology and Industry Working Papers, No. 2024/7, OECD Publishing, Paris, https://doi.org/10.1787/1668f250-en.
[48] Cingano, F. (2014), “Trends in Income Inequality and its Impact on Economic Growth”, OECD Social, Employment and Migration Working Papers, No. 163, OECD Publishing, Paris, https://doi.org/10.1787/5jxrjncwxv6j-en.
[28] Cucca, R. and C. Ranci (2016), Unequal Cities: The Challenge of Post-Industrial Transition in Times of Austerity, Routledge.
[4] de Mello, L. and M. Dutz (eds.) (2012), Promoting Inclusive Growth: Challenges and Policies, OECD Publishing, Paris, https://doi.org/10.1787/9789264168305-en.
[54] De Ruyter, A., R. Martin and P. Tyler (2021), “Geographies of discontent: sources, manifestations and consequences”, Cambridge Journal of Regions, Economy and Society, Vol. 14/3, pp. 381-393, https://doi.org/10.1093/cjres/rsab025.
[40] Demetillo, M. et al. (2021), “Space‐Based Observational Constraints on NO2 Air Pollution Inequality From Diesel Traffic in Major US Cities”, Geophysical Research Letters, Vol. 48/17, https://doi.org/10.1029/2021gl094333.
[36] Eurofound (2021), Impact of COVID-19 on young people in the EU, European Union.
[50] Eurofound (n.d.), “Gender equality”, https://www.eurofound.europa.eu/en/topic/gender-equality#:~:text=Around%2046%25%20of%20EU%20workers,EU%20%E2%82%AC320%20billion%20annually.
[55] European Commission (2024), Ninth Report on Economic, Social and Territorial Cohesion, https://doi.org/10.2776/264833.
[43] European Commission (2024), The twin challenge of equity and excellence in basic skills in the EU – An EU comparative analysis of the PISA 2022 results, Directorate-General for Education, Youth, Sport and Culture, Publications Office of the European Union, https://doi.org/10.2766/881521.
[27] Fiorentino, S. et al. (2024), “‘Left behind places’: What can be done about them?”, Cambridge Journal of Regions, Economy and Society, Vol. 17/2, pp. 259-274, https://doi.org/10.1093/cjres/rsae012.
[59] Frick, S. (2023), “Lessons from successful ‘turnaround’ cities for the UK”, Navigating Economic Change, Resolution Foundation, https://ora.ox.ac.uk/objects/uuid:0c294d50-60f0-41fb-af80-193b783946d0.
[42] Grislain-Letrémy, C., J. Sixou and A. Sotura (2025), “Urban heat islands and income inequalities: Evidence from French cities”, Ecological Economics, Vol. 235, p. 108624, https://doi.org/10.1016/j.ecolecon.2025.108624.
[39] Grislain-Letrémy, C., J. Sixou and A. Sotura (2024), “Urban Heat Islands and Inequalities: Evidence from French Cities”, Banque de France, https://www.banque-france.fr/en/publications-and-statistics/publications/urban-heat-islands-and-inequalities-evidence-french-cities.
[52] Hadzi-Vaskov, M., S. Pienknagura and L. Ricci (2023), “The Macroeconomic Impact of Social Unrest”, B.E. Journal of Macroeconomics, Vol. 23/2, pp. 917-958, https://doi.org/10.1515/bejm-2022-0039.
[11] Hickel, J. (2020), “What does degrowth mean? A few points of clarification”, Globalizations, Vol. 18/7, pp. 1105-1111, https://doi.org/10.1080/14747731.2020.1812222.
[33] Hochstenback, C. (2017), “Inequality in the gentrifying European city”, University of Amsterdam, https://dare.uva.nl/search?identifier=c6943254-c4aa-4c31-b164-57382ee698aa.
[38] ILO (2021), “Extending social protection to migrant workers, refugees and their families”, International Labour Organization.
[2] Kakwani, N. and E. Pernia (2000), “What is Pro-poor Growth?”, Asian Development Review, Vol. 18/01, pp. 1-16, https://doi.org/10.1142/s0116110500000014.
[12] Kallis, G., C. Kerschner and J. Martinez-Alier (2012), “The economics of degrowth”, Ecological Economics, Vol. 84, pp. 172-180, https://doi.org/10.1016/j.ecolecon.2012.08.017.
[61] Letta, E. (2024), Much More Than a Market, https://www.consilium.europa.eu/media/ny3j24sm/much-more-than-a-market-report-by-enrico-letta.pdf.
[49] Llena-Nozal, A., N. Martin and F. Murtin (2019), “The economy of well-being: Creating opportunities for people’s well-being and economic growth”, OECD Statistics Working Papers, No. 2019/02, OECD Publishing, Paris, https://doi.org/10.1787/498e9bc7-en.
[65] MacDonald, R. and A. Giazitzoglu (2019), “Youth, enterprise and precarity: or, what is, and what is wrong with, the ‘gig economy’?”, Journal of Sociology, Vol. 55/4, pp. 724-740, https://doi.org/10.1177/1440783319837604.
[51] Mackenbach, J., W. Meerding and A. Kunst (2010), “Economic costs of health inequalities in the European Union”, Journal of Epidemiology & Community Health, Vol. 65/5, pp. 412-419, https://doi.org/10.1136/jech.2010.112680.
[26] McCann, P. (2019), “Perceptions of regional inequality and the geography of discontent: insights from the UK”, Regional Studies, Vol. 54/2, pp. 256-267, https://doi.org/10.1080/00343404.2019.1619928.
[37] Mohammadi, S. (2024), “Racial Inequality and Discrimination in European Labor Markets: A Comparative Study of France, Germany and the UK, 2005-2021”, Paris School of Economics - Ecole des Hautes Etudes en Sciences Sociales, http://piketty.pse.ens.fr/files/Mohammadi2024.pdf.
[29] Montgomery, T. and S. Baglioni (2022), “Transformations of work in the era of the gig economy: towards a new paradigm of worker autonomy or exploitation?”, in Ness, I. (ed.), The Routledge Handbook of the Gig Economy, Abingdon, Oxon, https://researchonline.gcu.ac.uk/ws/portalfiles/portal/60876659/Montgomery_and_Baglioni_Final_Chapter_Accepted.pdf.
[62] OECD (2026), “Inclusive growth in EU cities typologies analysis”, OECD, Paris.
[34] OECD (2025), Cities for All Ages, OECD Urban Studies, OECD Publishing, Paris, https://doi.org/10.1787/f0c8fefa-en.
[45] OECD (2025), “The importance of monitoring neighbourhood conditions for children’s well-being and development”, OECD Papers on Well-being and Inequalities, No. 34, OECD Publishing, Paris, https://doi.org/10.1787/143ae959-en.
[60] OECD (2024), “Cities turning crisis into change: Post-pandemic pathways to resilience in complex times”, OECD Regional Development Papers, No. 94, OECD Publishing, Paris, https://doi.org/10.1787/05c005d5-en.
[35] OECD (2023), “Integrating local services for individuals in vulnerable situations”, OECD Local Economic and Employment Development (LEED) Papers, No. 2023/08, OECD Publishing, Paris, https://doi.org/10.1787/1596644b-en.
[32] OECD (2021), Brick by Brick: Building Better Housing Policies, OECD Publishing, Paris, https://doi.org/10.1787/b453b043-en.
[17] OECD (2020), How’s Life? 2020: Measuring Well-being, OECD Publishing, Paris, https://doi.org/10.1787/9870c393-en.
[44] OECD (2019), PISA 2018 Results (Volume II): Where All Students Can Succeed, PISA, OECD Publishing, Paris, https://doi.org/10.1787/b5fd1b8f-en.
[16] OECD (2018), Divided Cities: Understanding Intra-urban Inequalities, OECD Publishing, Paris, https://doi.org/10.1787/9789264300385-en.
[7] OECD (2016), Making Cities Work for All: Data and Actions for Inclusive Growth, OECD Publishing, Paris, https://doi.org/10.1787/9789264263260-en.
[15] OECD (2016), Paris Action Plan for Inclusive Growth in Cities, OECD, Paris, https://www.oecd.org/content/dam/oecd/en/about/programmes/cfe/oecd-champion-mayors-for-inclusive-growth/Paris-Action-Plan.pdf.
[19] OECD (2015), All on Board: Making Inclusive Growth Happen, OECD Publishing, Paris, https://doi.org/10.1787/9789264218512-en.
[23] OECD (forthcoming), Drivers of Growth in All Types of Regions, OECD Publishing, Paris.
[46] OECD (n.d.), OECD Local Data Portal (database), OECD, Paris, https://www.oecd.org/en/data/tools/oecd-local-data-portal.html.
[25] OECD (n.d.), OECD Regions, cities and local areas database (Income inequalities - Regions), http://oe.cd/geostats.
[22] OECD/UN-Habitat (2024), Global State of National Urban Policy 2024: Building Resilience and Promoting Adequate, Inclusive and Sustainable Housing, OECD Publishing, Paris, https://doi.org/10.1787/4db6994c-en.
[63] ONS (2024), Life expectancy for local areas of Great Britain: between 2001 to 2003 and 2021 to 2023 (dataset), Office for National Statistics, https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthandlifeexpectancies/bulletins/lifeexpectancyforlocalareasoftheuk/between2001to2003and2021to2023.
[64] Orth, B. (2023), “Stratified pathways into platform work: Migration trajectories and skills in Berlin’s gig economy”, Environment and Planning A: Economy and Space, Vol. 56/2, pp. 476-490, https://doi.org/10.1177/0308518x231191933.
[3] Parris, T. and R. Kates (2003), “Characterising and Measuring Sustainable Development”, Annual Review of Environment and Resources, Vol. 28/1, pp. 559-586, https://doi.org/10.1146/annurev.energy.28.050302.105551.
[6] Piketty, T. (2014), Capital in the Twenty First Century, Belknap Press of Harvard University Press.
[14] Rodríguez-Pose, A. (2018), “The revenge of the places that don’t matter (and what to do about it)”, Cambridge Journal of Regions, Economy and Society, Vol. 11/1, pp. 189-209, https://doi.org/10.1093/cjres/rsx024.
[53] Rodríguez-Pose, A., L. Dijkstra and H. Poelman (2024), “The Geography of EU Discontent and the Regional Development Trap”, Economic Geography, Vol. 100/3, pp. 213-245, https://doi.org/10.1080/00130095.2024.2337657.
[13] Rodríguez-Pose, A., J. Terrero-Dávila and N. Lee (2023), “Left-behind versus unequal places: interpersonal inequality, economic decline and the rise of populism in the USA and Europe”, Journal of Economic Geography, Vol. 23/5, pp. 951-977, https://doi.org/10.1093/jeg/lbad005.
[1] Samans, R. (2024), Human-Centred Economics, Springer International Publishing, Cham, https://doi.org/10.1007/978-3-031-37435-7.
[21] Savini, F. (2024), “Post-Growth, Degrowth, the Doughnut, and Circular Economy: A Short Guide for Policymakers”, Journal of City Climate Policy and Economy, Vol. 2/2, pp. 113-123, https://doi.org/10.3138/jccpe-2023-0004.
[47] Solt, F. (2020), “Measuring Income Inequality Across Countries and Over Time: The Standardized World Income Inequality Database”, Social Science Quarterly, Vol. 101/3, pp. 1183-1199, https://doi.org/10.1111/ssqu.12795.
[10] Stiglitz, J., J. Fitoussi and M. Durand (2018), Beyond GDP: Measuring What Counts for Economic and Social Performance, OECD Publishing, Paris, https://doi.org/10.1787/9789264307292-en.
[31] Tsai, P. and R. Buell (2025), The Hidden Costs of Working Multiple Jobs: Implications for Spending Behavior and Wellbeing, Elsevier BV, https://doi.org/10.2139/ssrn.5118176.
[9] World Bank (2014), A Measured Approach to Ending Poverty and Boosting Shared Prosperity: Concepts, Data, and the Twin Goals, World Bank, Washington, DC, https://doi.org/10.1596/978-1-4648-0361-1.
← 1. Austria, Belgium, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Japan, Korea, Latvia, Lithuania, Luxembourg, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Türkiye, the United Kingdom and the United States.
← 2. FUAs encompass the economic and functional extent of cities based on daily people’s movements.
← 3. Students are underachievers if they do not reach the OECD Programme for International Student Assessment (PISA) competence level 2, considered as the minimum standard for active participation in society. Level 2 students can, in practical terms, use basic algorithms, apply simple scientific knowledge and interpret simple texts.