Catalonia's medium-sized towns have less inequality than Barcelona and its metropolitan area

Catalonia's medium-sized towns have lower levels of wage inequality than Barcelona and its metropolitan area. That is the result of the study “Wage Income Inequality in Catalonian Second-Rank cities”, which has just been published in the journal The Annals of Regional Science, and is authored by Rafa Madariaga, Joan Carles Martori and Ramon Oller, researchers in the Data Analysis and Modeling research group at the University of Vic - Central University of Catalonia (UVic-UCC). The study examines inequalities in wage income in medium-sized municipalities in Catalonia and identifies the causes that lead it to increase or decrease.

41 municipalities with more than 20,000 inhabitants

The study takes the fact that the urban system of Catalonia is polycentric as its starting point: according to figures from the 2011 Census, 40% of the population lives in the Barcelona Metropolitan Area, 30% in 41 towns with more than 20,000 inhabitants, and another 30% in other smaller municipalities. "This distribution is representative of the European urban system, which has a network of medium-sized towns and is less concentrated in large metropolises than the United States, Canada or China, for example," say the researchers. While "global, connected and large cities have been the focus of most studies on urban inequality," their analysis has focused on these 41 Catalan towns, which they define as "medium-sized".

To determine how wage income inequality has evolved in these municipalities, the researchers analysed the data for two periods, 2001 and 2011, and applied the standard measurement of inequality, the Gini index, which ranges between 0 (total equality) and 1 (maximum inequality). The study shows that wage inequality fell in Catalonia during this period, and that this reduction affected medium-sized towns as well as the municipality of Barcelona and its metropolitan area. It also concludes that while the medium-sized towns had a Gini index of 0.30 in 2011, the same coefficient was 6.6% higher in the Barcelona metropolitan area, and it was 10% higher in the municipality of Barcelona. The results are comparable with the Gini index values for 2010 in some European cities, which were 0.38 for London, 0.36 for Madrid and 0.27 for Oslo.

According to the results, the medium-sized towns with the lowest level of wage inequality in Catalonia are Salt, Palafrugell, Amposta, Blanes and Sant Feliu de Guíxols, while those with the most inequality are Sitges, El Masnou, Cambrils, Castellar del Vallès and Premià de Mar.

The relationship between inequality and residential segregation

The article also looks at the relationship between inequality and residential segregation of the population, i.e. it studies whether the concentration of certain groups in specific areas affects inequality in the town. It does do considering three groups: the population with the lowest and highest wage levels, and the immigrant population that are nationals of non-European Union member states. The analysis concludes that the more segregated the higher income population, the greater the inequality in the municipality. At the same time, it shows that the more segregated the immigrant population is, the lower the town's levels of inequality. According to the study, Sitges is the town where the high income population is most segregated, while Lloret de Mar is the town with the most segregated low income population. The ranking of the most segregated immigrant populations is headed by the municipalities of Salt, Lloret, Figueres, Tortosa and Vic. The researchers conclude that "these results clearly show that the distribution of different groups in towns is important for studying inequality."

The causes of inequality

Finally, the paper considers the main factors that explain the evolution of inequality, which are changes in unemployment, immigration, the percentage of workers with a low level of education and with university studies, and the average income in the municipalities. The researchers conclude that the first two factors have contributed to reducing inequality, and the last three to increasing it.

The main factor explaining wage inequality is the average income in the municipalities. Average income increases as a result of "the growing presence of jobs in sectors with high salaries (banking, finance, telecommunications and business services) that expand the top end of the wage distribution and therefore contribute to increasing inequality." They also point out that "these sectors tend to be located in large global cities," which explains why inequality is greater in these cities (Barcelona and its metropolitan area), whereas average wage income levels tend to be lower in medium-sized towns. Nevertheless, they point out that wage inequality has fallen everywhere as a result of the economic recession, due to a widespread reduction in average wage income, especially at the top end of the wage distribution.

The authors of the study advocate "strengthening the activity and growth of medium-sized towns" as a policy to "offset the increase in inequality experienced by developed countries."