Labor market change, income polarization and urban housing inequality: a comparative study of Italy, Spain and the United Kingdom

Alessio Sardo, Daniela Arlia and Gianluca Cerruti

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Purpose This paper aims to explore the interaction between labor market reforms and housing policies in Italy, Spain and the UK. Design/methodology/approach By providing a comparative legal analysis of significant policy changes at the macro level and a descriptive overview of the evolution of their main economic determinants – wages and housing prices – at the micro level, the study highlights the socioeconomic impact of these reforms and their contribution to urban disparities. Findings The analysis suggests that the implementation of labor market reforms aimed at increasing flexibility and competitiveness coincided with heightened precarity, particularly for low-wage and nonstandard workers across all countries. Research limitations/implications The analysis does not address causality. Practical implications The paper suggests that stratified labor policy and work deregulation have an impact on urban inequality and wage distribution at sub-city level. Social implications The study argues that these reforms, coupled with macro-events such as the increase in global trades and the advent of ICT, might have exacerbated the socioeconomic inequalities at both national and local levels over the last decades by disfavoring less skilled workers, particularly in large cities. Originality/value The originality of the paper lies in its integrated analysis of labor-market reforms and housing policies as jointly producing urban disparities. Rather than treating wage stagnation, employment precarity and housing unaffordability as separate phenomena, the paper connects them through a comparative framework covering Italy, Spain and the UK. Its contribution is also empirical and spatial: it combines national regulatory trajectories with city-level evidence from Milan, London and Madrid, showing how macro-level reforms translate into uneven urban outcomes. This multi-scalar approach offers a distinctive perspective on the legal, economic and territorial roots of contemporary inequality.

Keywords: European Cities; housing affordability; housing market analysis; housing prices; reforms; wage disparities (search for similar items in EconPapers)
JEL-codes: J01 N0 R14 (search for similar items in EconPapers)
Pages: 60 pages
Date: 2026-12-14
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Published in International Journal of Housing Markets and Analysis, 14, December, 2026, 19(7), pp. 139 - 198. ISSN: 1753-8270

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