Spatial inequality

Spatial inequality refers to the unequal distribution of income and resources across geographical regions. Attributable to local differences in infrastructure, geographical features (presence of mountains, coastlines, particular climates, etc.) and economies of agglomeration, such inequality remains central to public policy discussions regarding economic inequality more broadly.

Whilst jobs located in urban areas tend to have higher nominal wages (unadjusted for differences in price levels or inflation) than rural areas, the cost-of-living and availability of skilled work correlates to regional divergences in real income and output. Additionally, the spatial component of public infrastructure affects access to quality healthcare and education (key elements of human capital and worker productivity, which directly impacts economic well-being).

Variation in both natural resource composition and quality of regional infrastructure are traditionally considered to be motivating factors for migration patterns between urban cities and rural areas. This, in turn, impacts the concentration of specific industries and sectors within a given area, as well as the investment choices made by local governments, thus perpetuating spatially-based disparities. However, there remain significant challenges in carrying out empirical research to quantify these disparities (particularly within a given nation, as opposed to across different nations), due to lack of region-specific datasets, the level of geographical disaggregation required to reveal such trends, as well as the inherent differences in incomes and living costs across different communities.