The OECD has published a report, What Works for Inclusive Growth in Cities, arguing that stronger economic performance in cities does not automatically translate into broader prosperity and that city governments need integrated inclusive growth strategies to close opportunity gaps. Drawing on analysis of more than 600 European Union cities, the report finds that higher productivity and gross domestic product growth are not consistently associated with lower poverty, reduced inequality or better access to jobs, housing, transport and services. It frames inclusive growth as both an economic and social issue, centred on five policy pillars: education, labour markets, housing and the built environment, infrastructure and public services, and fair climate action. The report says the costs of inaction are material. Across EU OECD countries, childhood disadvantage alone is estimated to cost 3.4% of gross domestic product each year, while a 3-point rise in the Gini coefficient is associated with a 0.35 percentage point reduction in annual gross domestic product per capita growth. It estimates that 37 million residents in EU cities are at risk of poverty or social exclusion and highlights that inequalities are often spatially concentrated and mutually reinforcing. The OECD also finds that city context matters, with large service-oriented cities tending to combine strong growth with persistent inequality and housing pressure, while smaller, shrinking or industrial cities more often face weaker labour markets and lower resilience. To improve delivery, it identifies seven enabling factors, including cross-government strategy, participatory design, granular neighbourhood-level data, sustainable financing, dedicated delivery capacity, monitoring and evaluation, and durable political support, and sets out a five-stage roadmap covering diagnosis, prioritisation, mobilisation, implementation, and monitoring, learning and adaptation. The report is accompanied by three case studies focused on people at risk of poverty or social exclusion, youth, and people with a migrant background, plus an online collection of city good practices. Its findings are also intended to inform discussions on the future of EU Cohesion Policy.
OECD2026-06-18
OECD sets out a roadmap for inclusive growth in cities after finding strong urban growth often fails to reduce poverty and inequality
The OECD has published a report finding that economic growth in cities often does not reduce poverty, inequality or access gaps on its own. It sets out an inclusive growth framework across education, labour markets, housing, services and climate action, backed by a five-stage implementation roadmap. The report also highlights seven delivery enablers, including better data, stronger co-ordination and more sustainable financing.