Research Insights: How Does Residential Segregation Shape Economic Inequality, and What Can Policymakers Do about It?

In Latin America, average wages vary greatly between countries richest and poorest regions. Differences in average wages across neighborhoods of the same city are even more significant. Residential segregation reduces access to economic opportunity. Families in less accessible neighborhoods spend more time and money commuting, are less likely to apply to distant jobs, and are more likely to remain unemployed if they lose their job. Public transportation investments can help to improve access to economic opportunity and reduce inequality in segregated cities if they are combined with zoning policies that allow for flexible housing supply in beneficiary neighborhoods.