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--. i�nl?1j�f�C�1C!I�i�� ;�,�.III�(�lirh,��:,! �;i I � ' I,_i � I i� � . m Neighbourhoods in decline often suffer from significant levels of population loss, resulting in a lower population density. The people most likely to leave such neighbourhoods are higher-income residents with families who can afford to relocate to the suburbs (CMHC 2001). Numbers of immigrants and refugees, who are among new arrivals, are typically insufficient to reverse the downward trend, particularly in slow growth cities. However, low population density is not a necessary feature of declining neighbourhoods. They can sometimes be densely populated and overcrowding can be a problem (ibid.). 3.1. Poverty and Segregation Concentration of poverty, and economic and ethnic inequality has become an important indicator of declining inner-city neighbourhoods (Gertler 2001; Cutler and Glaeser 1995; Hatfield 1997; Lee 2(�0; Bradford 2002; Broadway and Jesty 1998; Lynn and McGeary 1990; Massey and Denton 1993; Wilson 1987, 1999; Jargowsky 1997; Iceland et al. 2003; Glennerster et al., 1999). Since the early 1970s income inequality among neighbourhoods has been growing in most OECD countries. It has arisen from two sources: higher levels of unemployment, especially in Europe, and widening wage dispersions, particularly in the United States. Australian cities have also been subject to a substantial increase in neighbourhood inequality. However, the evidence seems to suggest that this change in inequality in Australia is less than in the US and the United Kingdom (Randolph and Judd 1999, Gregory and Hunter 2003). According to Kamal-Chaoui (2001) the situation has worsened in the 1980s and 1990s, both in countries with strong employment growth and in those where unemployment remains high. Even Nordic countries, which generally have comprehensive benefit systems, were not able to prevent the emergence of inequalities in some urban areas (ibid.). Wilson (1999) argues that the consequences of high neighbourhood joblessness are even more devastatina than those of high neighbourhood poverty. In his work When Work Disappears (1996) Wilson shows that many of today's problems in America's disadvantaged inner-city neighbourhoods - crime, family dissolution, welfare, low levels of social organisation and so on - are related to the disappearance of work. Wilson contends that it is employment changes that have triggered these polarisation effects but once set in motion they become self-reinforcing (ibid.). The causes of differences in residential patterns are often discussed in the context of racial and ethnic segregation. The factors that contribute to differing racial and ethnic residential patterns include preferences for living in neighbourhoods with those of similar race and ethnicity, socio-economic differences, and housing discrimination (Iceland et al. 2003). Massey and Denton (1993) show that the concentration of poverty among minority groups is primarily due to rising poverty rates for those groups coupled with persistent differences in residential patterns by race. 18