Dutch society does not accept high levels of income segregation. This tendency has repeatedly been revealed in public opinion surveys. Dutch government intervenes on different levels trying to mix low and high income groups both between cities and suburbs, as well as within city neighborhoods. The question is to what extent the assumptions on actual concentration and differentiation of different income groups hold true if compared to real figures. This paper publishes income data at 500 by 500 meter cells, showing significant spatial patterns of distribution and growth of low and high income groups. Remarkably, high income groups appear to be more segregated than low income groups. All Dutch central city areas have regained high income groups in the period 1995-2000, while the reverse happens in all other city neighborhoods. Despite those tendencies, large parts of the cities have a mixed composition of low, medium and high income groups.

Aldert De Vries

Ries Van der Wouden

English

Research Papers in Economics

Income segregation in The Netherlands: trends and analysis  
 
Paper submitted for the ESRA Conference Session K 
Amsterdam, 23-27 August 2005 
 
Aldert de Vries 
Ruimtelijk Planbureau (Netherlands Institute for Spatial Research) 
Willem Witsenplein 6 
2596 BK  The Hague 
The Netherlands 
+31 (0)70 3288780 
vries@rpb.nl  
 
Abstract 
The Dutch government intervenes on different levels trying to mix low and high income 
groups. Although based on common sense to avoid concentration of problem areas, 
practical aims related to measurable spatial patterns of income distribution are difficult to 
find. Even actual levels and trends of income segregation are hardly defined. This paper 
publishes income data at 500 by 500 meter cells, showing significant spatial patterns of 
distribution and growth of low and high income groups. Remarkably, high income groups 
appear to be more segregated than low income groups. All Dutch central city areas have 
regained high income groups in the 1995-2000 period, while outer city district areas are 
facing income stagnation.   
Keywords: segregation, low income groups, high income groups, urban renewal 
 
 1.  Introduction 
 
In The Netherlands, income segregation is a sensitive issue of debate. Concentration of low 
income groups, ethnic neighbourhoods, isolation, and integration problems are commonly  
said to be interrelated. This is best illustrated by a proposal of the Municipality of 
Rotterdam, that hopes to stimulate ethnic integration by temporarily prohibiting the inflow 
of low income groups. Also from other perspectives, spatially mixing income groups is an 
important issue. For instance, a recent proposal from the Ministry of Housing to allow 
some liberalization in the rental housing market was faced with strong opposition of  
renters and municipalities. They argued that in this way the income segregation would only 
increase. 
Still, little appears to be known about the problems caused by income segregation. 
Moreover, surprisingly little empirical evidence is available that quantifies income 
segregation, and processes causing income segregation are poorly studied. 
This paper starts with presenting a short overview of positions in the debate about 
income segregation. The question will be addressed to what extent income segregation is 
felt to be a problem. Then, actual patterns of concentration and distribution of income 
groups are depicted. For this, two levels of analysis are used: city and neighbourhood. 
 
2. The debate about income segregation 
 
Facts about income segregation in The Netherlands are scarce. The image of poor cities 
surrounded by rich suburbs holds strongly amongst policy makers, as a result of 
developments in the 1970s and 1980s. Yet, a study of the Ministry of Housing has shown 
that the city is catching up its income gap since 1994 (VROM, 2003). At the level of the 
neighbourhood, fears of increased segregated housing of low and high income groups also 
exist. However, quantification of this supposed trend often gets stuck in the rather abstract 
segregation index. The index shows that The Hague is more segregated than Amsterdam, 
and that segregation has indeed risen slightly since 1994 (SCP/CBS, 2003). 
   Much, though, is written on factors and processes that would are said to lead or not lead to 
concentration of income groups, like housing distribution systems (Jongerden, 2001), and 
'skewed housing' and urban renewal (van Kempen, 2000). Van Kempen, for one, expects 
urban renewal to induce mixing 'in situ', but concentration of low income groups elsewhere. 
Few however is being concluded on the degree to which this leads to separation of income 
groups in practice. Much research that is being done, is qualitative in character, without 
being based on factual data. 
  Whether segregation has consequences for the inhabitants involved, and what these 
consequences are, is still a point of discussion. Some expect that a mixed neighbourhood 
offers more opportunities for underprivileged individuals than a homogeneous low income 
area, as by meeting employed people in his neighbourhood a deprived person would be 
more encouraged to find a job. Individuals’ opportunities are thus said to decrease in 
concentrated low income areas, a mechanism also known as the “neighbourhood effect” 
(Anderson, 1990). In extreme situations this mechanism has indeed been observed, like in 
ethnic ghettos in the United States. In European countries, which have a higher level of 
income equality, more divergent findings are published. In Sweden, the effect has been 
confirmed, whereas in The Netherlands no evidence could be found (Musterd, 2004). 
 
The reasons for governments to fight income segregation are diverse. First of all, an 
important value in the Dutch society is that of equity between the different population 
groups. To a certain extent, also low income groups must be able to live where they want. 
A second reason focuses on creating opportunities for underprivileged individuals, trusting 
in the above described neighbourhood effect. A third reason starts from the perspective of 
the neighbourhood itself: the liveability of the area would be better assured in mixed 
income areas, particularly in terms of maintenance of (semi-public) areas. A fourth reason 
is based on the principle of “sharing the burden”. This point of view is popular among 
central cities wanting to export part of their “problem groups” to surrounding 
municipalities, and get more tax paying high income groups in return.  In practice, much is being done to promote diffusion of income groups, both on city-
suburbs level and on neighbourhood level. Many cities try to decrease the income gap 
between the city and adjacent municipalities. The Rotterdam proposal is the most extreme, 
but also other cities are signing agreements to decrease differences in housing stock. More 
social housing in surrounding municipalities would lead to diffusion of low income groups 
across the region.  
Also on the level of the neighbourhood, mixing is the leading trend in current urban 
policy. Most renewal projects aim at creating a more differentiated housing stock. Often, 
the main target is to provide the current inhabitants with more possibilities to stay in the 
neighbourhood when looking for new housing. However, also the mixing of income groups 
is frequently mentioned as a target in itself.  
 
3. Income segregation revealed 
 
We concluded that income segregation is an important issue, but that about actual 
developments little is known. To what extent do segregation and mixing of income groups 
really take place? To answer this question, income segregation is visualised at two levels: 
city and neighbourhood. 
 
Quantifying income segregation implies important methodological choices. The two main 
ones are the definition of income, and the way in which spatial distribution of income 
inequality is expressed. 
  Basically, Statistics Netherlands (CBS) defines income in three ways. Each 
definition puts emphasis on a particular aspect of reality. Applying the disposable income 
per person, high income levels are found in areas with many high income singles. The 
disposable income per household gives an aggregation of the income of all members of the 
household. With this definition, neighbourhoods with many double income couples or 
families rank first. To avoid both these effects, a third definition from CBS is used in this 
paper: the standardised disposable household income. This income variable corrects 
household income for household composition, thereby approximating purchasing power of 
each household (CBS Statline, 2005).  Spatial distribution of income between neighbourhoods is usually expressed with the 
segregation index. This index reflects the level of concentration of a certain population 
group, in this case low or high income groups. The definition of the neighbourhood unit is 
crucial here, as concentrations vary between different scales, e.g. districts or 
neighbourhoods. In this paper, 500 by 500 meter grid cells are used. Although grid cells are 
abstract units, they allow observations and therewith comparison over a longer time period. 
Besides, cities with different neighbourhood delineations can be compared based on the 
same unit size. 
 
Compared to their surroundings, all 22 selected cities have reduced their income gap in the 
period 1995-2000 (figure 1). Although applying different definitions for income and 
delineation of cities and their surroundings, VROM (2004) reached this same conclusion. It 
remains to be seen whether this is a temporary fluctuation or a disruption of the trend in the 
long run. 
 
Figure 1: Income in city and surroundings (1946-2000)
80
90
100
110
120
1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000
I
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city (person)
city (household)
suburbs (person)
suburbs (houshold)
 The question may be asked whether this development is a result of policy, or of 
autonomous processes. The number of owner-occupied houses has increased more in the 
cities than in their surroundings. This could be an indicator of successful policy. However, 
the magnitude of this growth cannot be related to that of the income for each individual 
city. Besides, other explanations of income growth in the cities are possible. Due to rising 
housing prices, an increasing part of high income households still lives in social rental 
housing. In addition, living in a highly urban setting is becoming increasingly popular, 
attracting the wealthy to the city. 
  Obviously, cities differ in the degree to which they catch up their income difference 
with surrounding municipalities. Amsterdam is exceptional to Dutch standards: being 
originally a city with a large low income population, its income growth is the largest 
compared to all other cities. The income gap compared to its surrounding municipalities has 
decreased from 12,8 to 8,3 percent in five years time. The income level of Rotterdam is 
slightly increasing compared to national levels, too. The income gap with its surroundings 
has decreased from 13,4 to 11,6 percent. This gap, however, is still the largest of all cities 
in the Netherlands. 
 
On neighbourhood level, no significant increase of segregation for low or high income 
groups is taking place. However, high income groups are more spatially segregated than 
low income groups. This is concluded from segregation indices for 22 cities. Stable 
segregation figures seem to indicate that the increase of income in the cities is not restricted 
to a limited number of high income ‘enclaves’. Nor do they indicate that lower income 
groups are pushed to less favourable, and more concentrated low income areas.  
  The degree of segregation differs among cities. The Hague is the most segregated 
city in the Netherlands, both in terms of low and high income groups (indices of 28,6 and 
36,4, respectively). Rotterdam has average segregation levels (23,6 low income, 32,9 high 
income), whereas Amsterdam has the lowest figures (19,0 low income, 29,4 high income). 
 Although segregation indices give an impression about the situation, they are still abstract 
figures. Maps of income segregation can provide valuable additional insights. 
  Concentrations of low and high income areas are clearly visible and hardly 
surprising for those familiar with the area. Housing characteristics determine to a large 
extent the existing patterns. Particularly the number of owner occupied housing correlates 
very strongly with income.  
  Considering income growth, the spatial distribution shows an entirely different 
pattern (figure 3). In all cities, income growth is concentrated in the city centre and its 
direct surroundings. This pattern ignores the current distribution of low and high income 
neighbourhoods. Although for the city as a whole, segregation indices seem to be stable, 
they conceal the large income dynamics taking place, favouring central areas at the cost of 
the outer districts of the city. The spatial extent of the growth area around the centre seems 
to correlate with the growth level of the entire city. In Amsterdam, with a high income 
growth, the growth area is large, whereas Rotterdam has a considerably smaller area while 
also its growth is less. 
  Looking at the current low and high income groups across the city, they differ both 
in their spatial distribution and the process they go through. First, low income areas are 
concentrated in large, continuous areas in the city, whereas high income areas are more 
distributed across the city and its surroundings. Paradoxically, high income households thus 
live more dispersed over small neighbourhoods, which in themselves show high 
concentration levels of high income. Second, the striking pattern of income growth in city 
centres and stagnation in the outer city districts is most evident for the low income areas.  
  
 
What do these figures and trends mean for concentration and distribution of income groups 
on neighbourhood level? In low income areas close to the city centre, gentrification is 
taking place. Original concentrations of low income groups are becoming more mixed, due 
to the inflow of middle and high income groups. This seems to be a common phenomenon 
in Dutch city centres. It is not clear whether this is a temporary situation. If high income 
groups continue to invade these areas, a moment will be reached when this neighbourhood 
becomes more homogeneous again: the initial low income concentration could be replaced 
by a high income one.    While predominantly low income areas in the centre thus become more mixed, in 
the outer districts they are getting more segregated. Middle and high income groups are 
moving out, without being replaced by others from the same income groups. Potential 
problem areas are those where low income figures are combined with stagnating growth. 
These areas are all located in the outer districts, not in or near the city centre.  
  The composition of income groups in city neighbourhoods is thus changing 
continuously over time. These dynamics are expressed in figure 4. Remarkable are the low 
income stagnation areas on the southern edge of Rotterdam. Also the low, medium and high 
income neighbourhoods with high income growth in the city centres are easily recognized. 
 
 
 Conclusion 
 
Income segregation is an important issue in urban renewal. However, the targets that are to 
be met with fighting segregation are not clearly formulated. No clear ideas exist of ongoing 
spatial distribution of income groups, nor about any particular “desirable end pattern”. 
  Actual income figures show that the city has reduced its disadvantaged income 
position as compared to its surrounding municipalities. This growth, though, is 
concentrated in the city centre. Because many low income households lived here originally, 
the influx of high incomes causes increased mixing. On the other hand, low income areas in 
the outer city areas are faced with stagnation and increasing segregation. 
  Many research questions remain open. What segregation figures and distribution 
patterns are found if other levels of analysis would be applied, like housing block or street? 
What are the consequences for inhabitants? What are the consequences for the liveability of 
neighbourhoods? Only by responding these questions, statements can be made about the 
desirability and direction of policy on the spatial distribution of income. 
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Income segregation in The Netherlands - trends and analysis

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Income segregation in The Netherlands - trends and analysis

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