ABSTRACT
Many consider economic inequality and segregation problematic as they are claimed to produce negative social effects of various kinds. This chapter discusses the effects of economic inequality, and moves on to the effects of segregation. The most prominent social phenomena that have been explored in relation to economic inequality are economic growth, health and social well-being and social cohesion. Segregation, and economic segregation more specifically, is often assumed to have additional effects on individuals: so-called neighbourhood effects. Living in rich neighbourhoods is associated with positive effects on individual outcomes, and living in poor neighbourhoods with negative effects. In the literature, most attention has been given to the negative effects of segregation on people living in poor neighbourhoods. The main social mechanisms through which the neighborhood composition may affect individual outcomes include, according to Galster, social contagion, collective socialisation, and social networks.
