Economic decline and residential segregation: a Swedish study with focus on Malmo

Economic crises are often associated with increasing levels of income segregation and income polarization. Poor neighborhoods generally hit more severely, with unemployment levels increasing and income levels dropping more than in better-off neighborhoods. In this article, we study the correlation between economic recession and income segregation in Malmo, Sweden, with focus on development in the regions' poorest neighborhoods. We compare and contrast these areas' development during a period of economic crisis (1990-1995) with development during a period characterized by relative economic stability. Our findings suggest that (1) income segregation and income polarization indeed increased during the period of economic crisis; (2) neighborhoods that were already poor before the crisis fared worse than the region in general; and (3) this development was due to both in situ changes and to residential sorting, where the differences in income and employment status between people moving into a neighborhood, those moving out, and those who remained in place were greater during the period of recession compared to the more stable period.