Making inclusive growth happen

SCORUS Conference 2016, Lisbon, 30 June 2016

Session 2: Measuring inclusive growth

and living condition at regional level

Making inclusive growth happen in Cities and Regions,Interim results

Gonnard Eric

on behalf of: Monica Brezzi, Soo-Jin Kim and Paolo Veneri

OECD Public Governance and Territorial Development Directorate

•Provide a set of internationally comparable

indicators to advance in the measurement of well-

Data

Project on Making IG happen in cities and

regions

OECD horizontal initiative on Inclusive Growth

Rationale and context

indicators to advance in the measurement of well-

being (focus on people) and inclusiveness in OECD

metropolitan areas.

•Assess the patterns of inclusive growth across

OECD cities and regions.

•Analyse how cities are co-ordinating policies and

engaging citizens and private stakeholders to foster

inclusive growth.

Evidence

Decision

making

Final Report October 2016 (UCLG Bogotà) and 21 Nove mber (Paris)

A policy shift towards inclusive growth in cities & regions: Only a goal or an ongoing reality?

Cohesion -orientedurban & regional policy

Growth -orientedurban & regional policy

Inclusive growth policyin cities & regions

Objectives Compensating temporarily for location disadvantagesof lagging areas

Tapping underutilised potential in all areas for enhancing urban & regionalcompetitiveness

Fostering both equity & growth in cities & regions

Unit of Administrative regions/cities Functional economic areas Functional urban areas (of all Unit of intervention

Administrative regions/cities & firms

Functional economic areas Functional urban areas (of all sizes) that reflect the reality of where people live and work

Strategies Sectoral approach Integrated development projects for economic growth

Multi-dimensional well-being for all

Tools Subsidies & state aids Investment in infrastructure to exploit competitive advantages of different places

Integrated policy packages that address both physical/ environmental capital and human/social capital

Key actors Mainly central governments Different levels of government & business sector

Partnerships across levels of government, as well as between public and private spheres, and civil society

HOW DO CITIES CONTRIBUTE TO HIGHER PROSPERITY AND TO HIGHER PROSPERITY AND

PEOPLE’S WELL-BEING?

Incomes of MA residents are on average 17% higher t han the rest of the population, but this difference varies across c ountries

Metropolitan vs. non metropolitan household disposa ble income ratio by countryper equivalent household; 2014 or latest available year

5Note: The graph plots the ratio between household disposable income per equivalent household in metropolitan areas over that in the rest of the national territory. Countries are ordered by increasing value of that ratio.

Metropolitan areas concentrate highly skilled peopl e

Share of working-age population with tertiary education, 2012

6

Different patterns of economic growth and inclusion in MAs 2000-14 (Europe)

Basel

Brno

Berlin

Hamburg

Essen

LeipzigDresden

Dortmund

Bremen

Hanover

NurembergBochum

Freiburg im BreisgauAugsburg

Saarbrücken Tallinn

LyonNantes

Grenoble

Budapest

RomeTurinGenova

Venice

Poznan

Gdansk

Katowice

Stockholm

1

1,5

2

An

nu

al c

han

ge

in p

arti

cip

atio

n r

ate

in t

he

lab

ou

r m

arke

t (p

p)

Growing income, growing labour

participation

Change in GDP pc and labour participation rates (Europe)

7

Vienna

Graz

Linz

BrusselsAntwerp

Ghent

Liege

Zurich

Geneva

Prague

Ostrava MunichCologne

Frankfurt

Essen

StuttgartDüsseldorf

Bremen Augsburg

Bonn

KarlsruheDuisburg

MannheimMünsterAachen

Copenhagen

Madrid

Barcelona

Valencia

Seville

Zaragoza

Málaga

Las Palmas

BilbaoHelsinki

Paris

Toulouse

Strasbourg

Bordeaux

LilleMontpellier

Saint-Étienne

Rennes

Grenoble

Toulon

Marseille

Nice

Rouen

Athens

Thessalonica

MilanNaples

Turin

Palermo

Genova

Florence

BariBologna

Catania

The HagueAmsterdamRotterdam

Utrecht

Eindhoven

Oslo

Warsaw

Lódz

Kraków

Wroclaw

Lublin

LisbonPorto

Gothenburg

Malmö

Ljubljana

Bratislava

LondonBirmingham (UK)

Leeds

Bradford

Liverpool

Manchester

Cardiff

Sheffield

Bristol

Newcastle

Leicester

Portsmouth

Nottingham

Glasgow

Edinburgh

-1,5

-1

-0,5

0

0,5

-8% -6% -4% -2% 0% 2% 4% 6%

An

nu

al c

han

ge

in p

arti

cip

atio

n r

ate

in t

he

lab

ou

r m

arke

t (p

p)

Average annual growth of GDP per capita

Well-being outcomes can be very different across cities in the same country

Income• 33,500 USD household income

between Washington D.C. and McAllen (around 30,000 USD among OECD countries)

• Gini index of household income between Celaya and Mexico City 0.12 (around 0.24 among OECD countries)

Jobs • 17pp in the unemployment rate

of Las Palmas and Bilbao (23pp among OECD countries)

• 36pp in the employment rate between Firenze and Palermo (32pp among OECD countries)

Differences between countries)

Environment• 23 mg/m3 in the level of air

pollution (PM2.5) between Cuernavaca and Mérida (21 among OECD countries)

Differences between highest and lowest values in metropolitan areas

Education• 21pp in the share of workforce

with tertiary education between The Hague and Rotterdam (26pp among OECD countries)

Satisfaction w

ith affordability of housing is lower

in cities than in the rest of the country (13 pp low

er on average)

Tokyo

60

70

80

% of people that is satisfied with the affordability of housing in their city

Co

un

try a

ve

rag

eC

ity

% of people satisfied w

ith the affordability of housing in their cityWarszawa

Ljubljana

Oslo

Roma

Stockholm

Lisboa

Helsinki

Madrid

Budapest

New York

Reykjavik

Jerusalem

London

Amsterdam

Sydney

Paris

Athina

Zürich

Santiago

Copenhagen

Bratislava

Auckland

Praha

Mexico City

Seoul Incheon

Tallinn

Dublin

Wien

Toronto

Istanbul

Brussels

Tokyo

0

10

20

30

40

50

POL

SVN

NOR

ITA

SWE

PRT

FIN

ESP

HUN

USA

ISL

ISR

GBR

NLD

AUS

FRA

GRC

CHE

CHL

DNK

SVK

NZL

CZE

MEX

KOR

EST

IRL

AUT

CAN

TUR

BEL

JPN

% of people that is satisfied with the affordability of housing in their city

HOW DO INEQUALITIES PLAY OUT WITHIN CITIES?

HOW DO INEQUALITIES PLAY OUT WITHIN CITIES?

Income inequalities are large within metropolitan areas and bigger cities are on average more unequal

Metropolitan population and income inequality, circa 2014 (controlled for income levels and country effect)

11

Top income households tend to segregate the most in neighbourhoods, in Canada, France and US; while bot tom income households in the Netherlands

Spatial segregation by income, neighbourhood scale (entropy index)

French cities

Dutch cities

12

Canadiancities

UScities

Inequality can be reproduced across generations: ch ildren growing up in the poorest neighbourhood have as adults 5.5% lo wer income in the Netherlands

Intergenerational income transmission in the Netherlands, 6 and 12 years after leaving the parental home(controlling for individual characteristics)

13

Source: Elaborations on longitudinal register data from Statistics Netherlands

Higher administrative fragmentation is associated w ith higher segregation of people in different municipalities

Hypothesis: Fragmented metropolitan governance can facilitate

segregation at the level of local units.

.1.1

5

Ineq

ualit

y be

twee

n lo

cal j

uris

dict

ions

, (C

ompo

nent

plu

s re

sidu

al)

Controlling for country fixed effects and other city characteristics (i.e. income , population, spatial

14

-.05

0.0

5

Ineq

ualit

y be

twee

n lo

cal j

uris

dict

ions

, (C

ompo

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plu

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0 .2 .4 .6 .8 1Administrative fragmentation

population, spatial structure), higher administrative fragmentation is associated to higher spatial segregation by income in different municipalities

POLICY APPROACHES FOR PROSPEROUS AND PROSPEROUS AND INCLUSIVE CITIES

Exploiting physical & environmental capital in cities & regions

Growth Inclusion

Affordable/quality housing

Land development

Achieve balance across policy decisions that help

expand people’s life choices & opportunities

Healthy communities

Connecting low-income communities to job

opportunities (e.g. public transport)

Green infrastructure

Transport investment

Valorising human & social capitalin cities & regions

Bring all segments of the skills spectrum…

High-skilled

… into different entry points tourban & regional labour markets

Education

Medium-skilled

Low-skilled

Employment (in existing

firms)

Entrepreneurship

Informal employment

• Gather a solid evidence base of outcome indicators on the different aspects of people’s lives

• Build partnerships among stakeholders around common strategic projects

• Target policy interventions on the right geographical scale (which can range from neighbourhood scale to

Key steps for promoting inclusive growthin cities & regions

scale (which can range from neighbourhood scale to the metropolitan scale)

• Combine short-term & long-term interventions

• Support participatory decision making and peer learning

• Tap innovative sources of financing

• Establish policy monitoring mechanisms