Why do some areas depopulate? The role of economic factors and local governments

Why do some areas depopulate? The role of economic factors and local governments

Cities 97 (2020) 102506 Contents lists available at ScienceDirect Cities journal homepage: www.elsevier.com/locate/cities Why do some areas depopul...

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Cities 97 (2020) 102506

Contents lists available at ScienceDirect

Cities journal homepage: www.elsevier.com/locate/cities

Why do some areas depopulate? The role of economic factors and local governments Fernando Merino, Maria A. Prats

T



Department of Applied Economics, Faculty of Economics and Business, University of Murcia, 30100 Murcia, Spain

ARTICLE INFO

ABSTRACT

Keywords: Population dynamism Depopulation Local economy Societal infrastructures Comunidad Valenciana

The aim of this paper is to analyse at what extent purely economic factors and features linked to the life quality promoted by local governments are important to attract or keep population at a local level. Specifically, we pay attention to the evolution of the population as well as in the number of newcomers (local immigrants) from elsewhere. An econometric model was estimated where the dependent variable captures the increase of inhabitants along 2012–2016 of the 543 municipalities of the Comunidad Valenciana (Spain). The results point out to the fact that population increases in those municipalities where the economic situation seems to be better (higher weight of manufacturing & agriculture, higher income) being non significative the public societal infrastructure.

1. Introduction and motivation According UN data 46.7% of the people lived in urban areas in 2000 increasing to 54.8% in 2017. However, it must be noted that this trend presents important differences: while in emerging countries it is mostly due to migrations to cities, in high income countries it is due to aging populations in smaller villages. Focusing on developed countries, it is recognized that the population concentration has important consequences over a large set of elements that go from the demand of public services and infrastructure to the ecological effects of abandoned lands or the cultural heritage and traditions' preservation. In Europe, the depopulation phenomenon is not evenly distributed across countries. Although the population density is not an indicator of depopulation, Eurostat data indicates that the less densely populated NUTS3 regions are in Northern Scandinavia and parts of Spain. However, there is an important difference between these two areas: while the Scandinavian regions never were highly populated (and then, should be called un-populated), the Spanish ones have reduced their population notably in the last decades (they are de-populated). Although in most countries rural areas lost part of their population, the Spanish case can be considered more extreme (Pinilla & Sáez, 2017). However, in some countries a trend in the opposite sense has been observed (called initially counter-urbanization with the pioneer works of Cloke 1985; Champion, 1989, 1994, 1998; or more recently Halfacree, 2008) due to a higher valuation of a green environment (Lindgren, 2003; Ragusa, 2010; Grimsrud, 2011), life quality out of



large cities (Bijker, Haartsen, & Strijker, 2012; Halfacree, 2012), pricegap between cities and rural areas (Remondou, Gkartzios, & Garrod, 2016; Weekley, 1988), etc. Depopulation is a demographic and territorial phenomenon, which consists in the decrease of the number of inhabitants of a territory in relation to a previous period as a consequence of a negative vegetative growth, a negative migratory balance or both simultaneously. The causes that explain it can be complex and require deep analysis in order to make a proper diagnosis combining a wide group of factors: demographic (Coleman & Rowthorn, 2011; European Committee of the Regions, 2017; Van Bavel, 2010; Westhoek, van den Berg, & Bakkes, 2006; Wiest et al., 2011), psycho-social (Mitchell, 1950; Paniagua, 2002a; Stockdale, 2002), environmental (Abercrombie & Urry, 1983; Crump, 2003; Gare & Arran, 1995; Paniagua, 2008; Willians & Jobes, 1990; Willians, Shaw, & Greenwood, 1989) and economic (Boyle, Halfacree, & Robinson, 1998; Commins, 1978; Fielding, 1989; Paniagua, 2002b; Pezzini, 2001). To tackle the problem of depopulation is also addressing the causes that generates it. In this article we focus only on economic factors, not only as the cause of the depopulation phenomenon, but as the fundamental factor to reverse this process because the affected areas are generally economically depressed. The large depopulation processes have been produced as a result of high migration rates where migrants were looking new job opportunities with better salaries and a better quality of life. The demographic decline is usually accompanied by economic decline that generate

Corresponding author at: Department of Applied Economics, Faculty of Economics and Business, University of Murcia, 30100 Murcia, Spain. E-mail addresses: [email protected] (F. Merino), [email protected] (M.A. Prats).

https://doi.org/10.1016/j.cities.2019.102506 Received 9 May 2019; Received in revised form 3 October 2019; Accepted 4 November 2019 0264-2751/ © 2019 Elsevier Ltd. All rights reserved.

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vicious circles that complicate the future of the areas that suffer from it. As Coleman and Rowthorn (2011, p. 218) observe “Regional and urban decline, relative or absolute, has always accompanied regional and urban growth in other parts of the same country”. The problem of a downward population trajectory in a municipality or a region has been due to loss in interregional competitive position and loss of intraregional competitive position (Hill, Wolman, Kowalczyk, & St. Clair, 2012). Being aware of the magnitude of the depopulation problem, it is essential to think that “rural depopulation can also be slowed down and reversed by the deliberate intervention measures of the central and local authorities” (Commins, 1978). This does not mean that in the face of such a complex phenomenon automatic rules may apply but that public action, at different levels, can contribute to solve or mitigate the depopulation problem. Public intervention (out of extreme cases far away from European societies in the 21st century) is not enough to determine the population distribution because other important forces are relevant too (economic, social, cultural, etc.). But, it is clear that certain public interventions can turn or moderate the effect that those other drivers have. Therefore, in this article we underline the importance of public intervention to address the problem. Following the new modern endogenous growth theories (EGT) (see Barro, 1990; Lucas, 1988; Rebelo, 1991; Romer, 1986) economic growth is not totally independent of economic policy, since it has permanent effects on long-term growth. This is a clear difference with respect to neoclassical models, in which long-term growth is totally independent of changes in economic policy. Neoclassical economics is characterized by their confidence in the proper functioning of markets and, then it advocates minimal intervention by the State. Meanwhile, the EGT highlight the importance of institutions in growth, a novel subject in the growth literature, although it had been addressed mainly in the theory of economic development. In this way, the institutional issue constitutes an element of confluence between the new theory of growth and the theory of economic development. Thus, the different level of development between countries (regions or municipalities) can be explained by institutional differences (North, 1990). Recognizing the importance of the institutional framework in economic growth implies the acceptance of public intervention to correct market failures. These public interventions are broad and attempt to address the problem in all its complexity through specific actions that attempt to combat the causes of depopulation. In this article we will focus of the effectiveness of public actions (and at which specific level of government) on the economic factors that cause changes in the population distribution. The existing literature has stressed widely on economic factors whether linked to available infrastructures, such as transport (Franklin, van Leeuwenb, & Paez, 2018; Graziul, Seymour, & Schleith, 2018; Kasraian, Maat, Stead, & Wee, 2016; McArthur, Thorsen, & Ubøe, 2014; Thorsen & Thorsen, 2017; Zhao, Leng, Sun, & Yuan, 2018) or the situation of the economy, Commins, 1978, Storper, 2011, Easterling, Angelescu, & Zweig, 2011. Given the recognized importance that the economic situation and labour opportunities have to keep the population, promotion of tourism to rural areas1 (Puiu & Ovidiu, 2008 in Romania, Badulescu & Badulescu, 2017 in Hungary, Lupi, Giaccio, Giannelli, & Scardera, 2017 in Italy, Valaoras, Pistolas, & Sotriopoulou, 2002, in Greece, etc.) or linked to traditional activities (Calabrò & Vieri, 2016 about food and wine in Italy) has been widely used as a strategy to mitigate depopulation since it creates an additional demand of the products that are specific of rural areas that depend on non-movable resources like the

environment, historical/cultural heritage, etc. in the expectation than those touristic flows do not arrive to generate the perverse effects that mass-tourism can produce to its inhabitants. But beyond the economic situation that can be measured by traditional economic indicators like income, GDP etc., the wellbeing of living in a place can be generated by factors different from those ones that proxy the economic situation. This distinction is important and the results have clear implications. If the economic factors are relevant, then there would be wider policy implications at regional, national or supranational level. Fighting against depopulation, in this context, would become a more complex phenomenon that would need an important planning. The problem would exceed what a local municipality could do and manage (gardens, sports facilities, etc.) and all the efforts should be coordinated and not based on mere occurrences of local governments, perhaps directed by electoral purposes. On the contrary, if the only relevant factors are those ones that are responsibility of local governments, higher government level policies have few possibilities to influence the evolution of population across municipalities. The research question of this paper is to know if the municipalities have the capacity to face the depopulation with policies that improve the quality of life of their inhabitants (providing services such as cultural services, sport facilities or green areas) or if, on the contrary, it is necessary to involve economic investments (to change or improve the productive structure or income levels) by regional or national public institutions to face this phenomenon. Therefore, in this research we try to tackle the depopulation problem with a more complex perspective that includes different kind of factors that depend on different political-making institutions. Doing so, we look for empirical evidence that supports the importance of the economic factors as drivers of population dynamism promoted by regional, national or supranational policies more than municipalities ones. We are convinced that fighting against depopulation is a complex phenomenon that requires the implementation of solutions implemented by regional and national institutions in the strategic planning of the territory. Therefore, although municipal action is important, depopulation requires an economic investment that exceeds the capacity and scope of the municipalities. It is an important and valuable question to have a more detailed knowledge on the factors that allow to mitigate the forces that compel to depopulate. As it was stated, the depopulation of rural areas is an important issue in the European Union (EU). Consequently, the EU's rural development policy is funded through the European Agricultural Fund for Rural Development (EAFRD) worth €100 billion from 2014 to 2020, with each EU country receiving a financial allocation for the 7year period.2 All those programs need to focus on whether they finance infrastructures that improve the quality of life of people living in smaller towns, compensating the scarcity they suffer in comparison with large towns, or in the promotion of the economic activity and increasing income as ways of increasing the appeal of rural areas to host population. In accordance with these important European, national and regional plans, we are interested in elucidating if local policies can be implemented in order to increase and attract population. Therefore, if a municipality has endowments that contribute to improving the quality of life it will not lose population and may even be a magnet for immigrants derived from the lower cost of land in these areas. In this context, the municipal budget emerges as an important tool to regulate population behaviour. But if these factors are not relevant to fight against depopulation then it will be necessary for municipalities to take it into account for better management of their budget. Beyond that it is quite important to have accurate population projections at local level (since planning and development of many key elements of a city such as public infrastructure investments or provision

1

See also to reinforce the paper of tourism as an extraordinary driving force to fuel economic growth and job creation: Bramwell (1994), Sequeira and Nunes (2008), Fayissa, Nsiah, and Tadasse (2008), Figini and Vici (2010), Seetanah (2011), Holzner (2011), Ruhanen (2013), Pablo-Romero and Molina (2013), Paci and Marrocu (2014) and Tugcu (2014).

2 See European Commission: development-2014-2020_en.

2

https://ec.europa.eu/agriculture/rural-

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of public services will depend on them) and in many cases there are important misprojections (see Park & LaFrambois, 2019, for an analysis in the US). Subsequently, knowing at what extent some factors affect population evolution at local level will help to produce more adequate projections. The existing literature is concentrated in one of the two research lines: On the one hand, we find analyses that, based on economic growth theories, focus on economic variables (such as GDP, income, growth expectations, etc.) as determinants of population growth. On the other hand, different papers have analysed specific factors to determine the appeal of locations to host population. However, there is a lack of studies where the two elements are combined in order to highlight the relevance of each one. A consequence of analysing the question from these separate perspectives is that it is not possible to determine which of the proper institutions are the adequate to mitigate the rural depopulation. Analyses that combine factors that can be managed by national/regional governments as well as local entities can help to fill this gap. At the extent of the authors' best knowledge, this is the first attempt to determine the government level that should focus the depopulation phenomenon based on data of the observed behaviour of inhabitants. As it was indicated, the aim of this paper is to analyse at what extent purely economic factors and/or features linked to the life quality (that can be managed at the local level) are important to attract or keep population. At this end in this research, and in order to test the importance of the economic factors in the depopulation problem at a local level, we will focus in one of the Spanish regions Comunidad Valenciana (CV, henceforth). We believe that CV is a good example for the study of this question and meets requirements that make it a reference area in Europe, for two reasons: It is a region with close to five million inhabitants (according to INE, 2016 data) which suppose 10.7% of the national total (being only 4.6% of the territory) and with a great disparity between the coastal area where population grows and the interior where the depopulation phenomenon is important with 41% of the municipalities with < 1000 inhabitants. Specifically, in this paper we select, for the period 2012–2016, a set of variables linked to life quality factors that can be affected by local policies (cultural centers, sport facilities, parks and green areas) or those linked to economic factors that go beyond the local scope of policies at least at short term (sectorial economic structure, income) in order to test if it is possible to determine a relationship between one or more of them and the increase of population in the municipality. So, beyond the specific results the analysis can raise, an important conclusion will be obtained on the level of government that should be implied in the policy to avoid depopulation. Obviously, local governments are the best fitted to design, develop and manage venues that provide cultural services, sport facilities or green areas; on the contrary, promotion of an economic structure, income levels are best managed by regional or national levels of governments. According which kind of factors emerge as the most relevant ones to explain depopulation, we can justify what levels of government should be involved in these policies. The paper is structured as follows. Section 2 makes a review of the literature on the relationships between local policies and effects on population. Section 3 briefly describes the methodology adopted. Section 4 shows the statistical and econometric analysis to discuss the main implications of the paper and point to future research lines in Section 5. Finally, in Section 6, the main conclusions are summarized.

and the political institutions play an important role in it (Barro, 1990; Lucas, 1988; Rebelo, 1991; Romer, 1986) promoting permanent effects on long-term growth. Recognizing the importance of the institutional framework in economic growth implies accepting the importance of public intervention to correct market failures. So, inside this framework, research is needed in order to know which government level is best fitted (given the kind of responsibilities each one has) to achieve the goal of keeping the appeal of different places to live there. Barro (1990) introduced the idea that the composition of public expenditures has important growth implications, both in terms of productive and non-productive public expenditures, like infrastructures, R &D, and human capital or social welfare respectively. These expenditures are necessary to achieve social equity and to balance spatial disequilibrium (see also Aschauer, 1989; Barro, 1981; Barro, 1987). Furthermore, in the context of small municipalities they are especially important since they concern to the inhabitants of a municipality affecting their decisions of working and living. The problem of the mobility of inhabitants has been treated, deeply, from the point of view of the interjurisdictional competition, that can be defined as “the manner in which the free movement of goods, services, people and capital constrain the actions of independent governments in a federal system” (ACIR, 1991, p. 10). The same point of view can be applied to the municipalities that compete with others to increase their population at the expense of other ones. This current of thought has been followed by different authors. In a seminal paper, Tiebout (1956) introduced the term of Local Public Goods (LPG) to refer to the endowment of public goods by a municipality to its community. In terms of the LPG, the public goods have an important spatial dimension and could be defined as such goods that are provided for a specific area delimited both geographically and administratively. Depending on the area we can speak about local, regional, or national and global goods. The education, parks, a fire department, schools, sport facilities, hospitals, etc. are typical examples of LPG. For this kind of public goods the existence of a decentralized mechanism of management could lead to obtain optimal results. In this context, the agents reveal their preferences for public goods by choosing the municipality that better combines the basket of taxes to pay and the LPG to consume. But the problem with this model is that as agents choose freely, and problems of congestion can arise as well as problems of depopulation in small municipalities. For example, in the case of Spain (with a serious problem of excessive municipalities' fragmentation with low population density) commonwealths are a very good solution allowing grouping efforts in services and increasing its benefits for attracting population to fight depopulation in these areas (Capel, 2009).3 Following Tiebout (1956), Buchanan (1965) introduced the theory of clubs that tries to solve congestion problems. A club is a group of individuals seeking mutual benefits for themselves, paying a right or a fee, and excluding anyone who does not belong to it. In this context, it is possible to generate congestion problems when the number of members exceeds an optimal level (we can think on swimming pools, sports areas, social clubs, etc.). Therefore, the objective is to determine the marginal member that maximizes the benefit of the club members. On its part, Hirschman (1970) pointed out the problem related to the way in which individuals of a community are able to regulate the provision of the good or service performed by the local government. Hence, individuals demand results to its representatives (governors)

2. Theoretical framework and literature review

3 The list of services offered by a commonwealth in Spain is: collection and treatment of urban solid waste, prevention and extinction of fires, promotion of tourism, cultural activities, water supply, tax management, civil protection, healthcare, sports, conservation, improvement and signalling of public roads, technical-urban services, educational services, environmental protection, social care, protection of historical-artistic heritage, public transport of travellers, social services (Orduña, 2009).

This section tries to identify some of the factors that may affect the spatial distribution of public expenditures over time and its consequences in terms of increasing or decreasing population, or in terms of economic growth. In the context of the new modern theories of endogenous growth (EGT) economic growth depends on economic policy 3

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being the main aspect of this theory the existence of an exercise of accountability on the part of the local governors in which consumer associations or neighbour communities develop an important role. But also, in the context of very small cities, we can think about the collaboration between the public administration and the private initiative that has been, in a general way, highly valued in recent years. The private companies established in one place must cooperate in those initiatives with very good results in terms of culture activities. Oates (1972) tax decentralization theorem says that the level of well-being of a community is usually higher if public consumption levels are provided by each jurisdiction independently instead of by a central government that assign the same level to all jurisdictions. Oates and Schwab (1988) show that there exists competition among jurisdictions via lowering taxes or superior public goods that attract or retain migrants and inhabitants, as a result of which it occurs “the exit mechanism” or “voting with their feet”, or, in terms of Besley and Case (1995) “the voice mechanism” through the voters. For example, Da Silva Costa and Fernandes (2009) try to test the “voting with their feet” model by examining Greater Porto metropolitan area of Portugal (with six central municipalities) in three different years. They construct an index with variables measuring the variety of public goods and services offered by local governments and other variables capturing heterogeneity of local jurisdictions (municipal facilities like parks, elderly care, health care, culture, sports; sources of income like work and property, temporary subsidies, family-dependence, retirement pension, social support; occupation of inhabitants; education level of the residents; employed inhabitants by sector of activity; age; and municipal capital expenditures). The authors cannot find positive results except in the case of socio-economic characteristics. The more detailed empirical literature on public goods and its effects on economic growth or on population, at subnational level is not conclusive and the analysis of the effects on small municipalities has a very variable casuistry. Benito, Bastida, and Guillamón (2010) studied the influence of urban sprawl on per capita spending and assuring the negative effects of the higher population density on the total investment and current expenditures per capita and claiming in favour of smart growth in municipalities. In general terms, small municipalities can have advantages compared to large ones to attract new population: can be innovative, have teaching centers, have access to knowledge and culture, and be well connected with dynamic areas of economic development, and they can be very nice places to live (Capel, 2009). The innovation and the adoption of ICT could be a good strategy to attract population to small and medium cities but not to avoid depopulation in very small municipalities because of their own geographical characteristics with isolated areas or economic situation. Though, recently, Cooke and Shuttleworth (2018) provide unfavourable evidence on the capability of ICT to contribute to enhance residential change and both interregional and international migration, in a study using data from North Ireland. The implications of the effects of variables like school or health services have received a lot of attention in the recent empirical literature for the USA (Hoxby, 2000; Rothstein, 2006; Urquiola, 2005), France (Fack & Grenet, 2010; Jean, 1995), Nordic Countries (Lundholm, Garvill, & Malmberg, 2004) or Austria (Lais & Penker, 2012). For example, Mahdavi and Westerlund (2017), in an empirical analysis with a panel of 48 USA municipalities (1957–2008) found that expenditures on education, sanitation, highways and other utilities had a deeper impact than expenditures on health and hospitals, police and fire protection, and public welfare. In Spain, Escribano (2012) focuses on the value of basic education and health-care services in the population's residential decisions in an interior municipality of CV from the point of view of both the temporarily and permanent population. The basic conclusion for them is that the basic services (school, medical service) are fundamental in the population's decision but also depend on more significant territorial variables like mobility, employment or family support.

The effects and the problems of variables like cultural strategies to promote and revitalize cities is being analysed from different points of view but all them with the same common denominator: cultural infrastructure and activities are an economic asset for the city. Evans and Foord (2008), in an empirical paper for the UK case, concluded that the lack of planning strategies or guidance for cultural activities is due in part to the discretionary nature of arts' provision and also to the fact that there is no single type of provider (also public or private) evidencing a fragmented cultural system. Grodach and Loukaitou-Sideris (2007) concluded, in an empirical work for the USA municipalities, that the development and support of cultural activities in most cities are guided by the effects of private entrepreneurial objectives. Van der Borg and Russo (2010) studied, for the Netherlands, in which ways the synergies between cultural development and local economy can be activated and boosted. Escalona-Orcao et al. (2015) analysed the importance of the cultural heritage, in terms of creative activities, as an innovative strategy to apply in the least advanced areas (local and rural) in Spain. They concluded that creative activities are an adequate challenge to small cities and rural areas in Spain to generate creative clusters that give a competitive benefit and new opportunities for growth to these areas. The variables related with sports have been studied too as an engine for urban growth and development. Friedman, Andrews, and Silk (2004) studied the consequences of using sport amenities, sport-facility constructions or the presence of a major-league in the United States as an urban redevelopment initiative. In general terms, the presence of sports centers could be a good factor to be considered for inhabitants to reside in a small city and a political option against depopulation. Other variables that are becoming important strategies of community development and of local governance are public gardens, parks and community gardens. Gough and Accordino (2013) in a USA study detect the positive contributions that local government partnerships with American Public Gardens Association (a specific cultural institution that maintain gardens for education, research and conservation purposes) make to community development through their services. Finally, housing could be another important variable to maintain or gain population from different points of view. First, it can be used by politicians to attract population. The impact of variables like public housing is quite important in Europe due to the high percentage of population living in that kind of houses (Oates, 1969; Priemus & Dieleman, 2002; Rutter & Latorre, 2008; Saiz, 2010; Verdugo, 2011). These factors can attract population of other municipalities or migrants. Second, it can be the exponent of a new phenomenon of urban to rural migration studied from different perspectives: a) Migrants.4 Pinilla, Ayuda, and Sáez (2008) studied the special case of the Spanish Autonomous Community of Aragon, where rural depopulation is severe but recently many rural areas are net receivers of population. This is due to two noticeable phenomenon related with the migration becoming now the basic reason of the demographic regeneration in some areas: new work opportunities to immigrants because of the high rates of aging of local population; and the new opportunities of employment of an emergent touristic sector in this area. b) High price of houses in the cities.5 Torres-Elizburu (2015) studied the new arrivals of internal population to less populated municipalities of the Basque Country in Spain looking for municipalities located close to bigger cities and with good accessibility. This flow has reversed the natural aging process of these towns because the new inhabitants are young families with children. c) Quality of life or amenity migrations. Middle-aged families or 4 5

4

See Membretti (2015), Perlik and Membretti (2018). See also McArthur, Osland, and Thorsen (2016).

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retired people, with higher purchasing power, looking for isolated towns with better conditions in terms of amenities will carry on this process (Gosnell & Abrams, 2011). From an interesting point of view, Solana-Solana (2010) points out the effect of the gentrification,6 especially in different areas of Barcelona and Gerona, in Spain.7 The attractive landscape and the assessment of the quality of life have influenced a growing immigration from urban areas to small towns, some of them with problems of depopulation.

immigrants in order to know if this part of the population evolves differently from the vegetative growth of previous inhabitants. To analyse the characteristics of those municipalities that increase their population, an econometric model was estimated where the dependent variable captures the increase of inhabitants in 2012–16 and the explanatory variables considered were variables linked to life quality factors that can be affected by local policies (endowments of cultural centers, sport facilities, parks and green areas) or those linked to economic factors that go beyond the local scope of policies at least at short term (sectorial economic structure, income). So, we will estimate an econometric model as

Beyond these factors that may capture factors that have a direct effect of the life quality of the inhabitants of each location, there are some economic factors that will affect the appeal of each location to live in. The first one is the income that inhabitants may expect to get in each location. The effect of this variable may come throughout a double source. On the one hand, a higher income will allow increasing the consumption possibilities. On the other hand, a higher income (in the observed range of one region) will increase the variety of goods (from basic needs such as food or clothing to luxury goods that may find a market if the income is high enough) and services (from banks to hairdressers or medical services) that each location will host. In the same perspective, the number of firms based in each town may become an indicator of the opportunities that it offers to find jobs or to develop and improve a professional career for younger people. Related to this, we find that the productive structure, this is the job specialization, may play an important role that deserves to be analysed. Different analyses have shown that the impact of the financial crisis has been quite different across countries and regions according which ones were the dominant sectors (Groot, Möhlmann, Garretsen, & de Groot, 2011). For example, in Spain those regions where manufacturing had a larger weight suffered less the impact of the crisis than those ones where construction or some kinds of services were more important (Cuadrado-Roura & Maroto, 2016). Besides, the importance of each sector may affect the appeal of a location for immigrants, especially those ones that moved by economic reasons. Hitherto, and as far as we know, empirical literature has treated the role of economic factors from the perspective of a single element (productive structure, life quality, income, migrants, transport, pricing house, cultural strategies, public gardens, parks, community gardens, sport facilities, etc.) without developing analyses that comprehends several of them. But on the other hand, the literature has not raised the effectiveness of economic measures at different levels of government (national, regional or municipal level). In this article we have tried to introduce a new line of empirical analysis that takes into account not only the effectiveness of different economic factors but also at what level of government its implementation would correspond. The results of our analysis have important economic policy consequences because they reveal that the management of public spending cannot be the result of local political opportunities but of an integrated planning in which, above all, national and supranational authorities must coordinate the process.

PopChangei = + 1 Populationi + 2 (Populationi ) 2 + 3 Cult centersi + 4 Parksi + 5 Sport centersi + 6 #firmsi + 7 Dis tan cei + 8 %jobs agri + 9 %jobs manufi + 10 %jobs consti + 11 PubInvesti + 12 DispIncomei + i i = 1, …N municipalities

Although a variable to capture the initial size is included (in a quadratic form, so the econometric estimation will have the possibility to adjust to a constant/increasing/decreasing slope) an additional effect may exist that distinguishes larger and smaller towns. To consider that possibility, the model has been estimated both for the total set of municipalities as for those ones with more/ < 10,000 inhabitants. 3.1. The database The used data are provided by the Statistical Office of Generalitat Valenciana (the regional government). It collects data from different sources and presents them homogeneously for the 543 municipalities that comprise it. The figure of population is generated in the continuous census that every local government obtains as the result of the compulsory registration of the population living in it which is also a requirement to access to basic services (health, education, social services, etc.). In the continuous census the birthplace is one of the registered data as well as the previous place where each person lived, so it allows identifying the immigrants in each municipality (those people that register with a previous residence in another municipality or abroad). The automatic withdraw of people that register in another town when they move avoids any possibility of double accountancy or errors in this variable. As it is indicated in the model, the dependent variable will be the growth rate of the population of each municipality, between 2012 and 2016. The public infrastructure related to cultural endowments for each municipality combines the number of cultural centers, libraries, socialcivic centers, seniors' citizen's social clubs and similar installations located in each municipality. The number of theatres is not included, since out of the largest cities, there are no specific venues for them and these activities (film exhibitions, theatrical performances…) are developed in cultural centers as well as in social-civic centers. In order to avoid any possibility of endogeneity if these venues increase as a result of a population increase, we have chosen the value for 2012 (the first year of the analysed period, so previous to the analysed population change). In the same vein, the number of urban parks (gardens) is reported by each local government to the Statistical Office which publishes it. However, for the largest cities this data is not available given that their municipalities do not report them, probably due to the difficulty to register all the green areas in a large city. In the statistical analysis, these variables are presented per thousand inhabitants in each municipality. The public infrastructure for sports makes references to the number of public sport centers (such as in-door & out-door sport fields, swimming pools, etc.) not being included the private ones (located in condominiums or private gyms, for instance). This variable is not reported yearly, and the latest one available (previous to the period) is for 2005. As it was done concerning the cultural infrastructure, this figure is normalized over the total population and presented per thousand inhabitants.

3. Methodology The methodology consists of analysing the evolution of the population in each of the 543 municipalities of the CV, both in total as well as in the number of newcomers (local immigrants) from elsewhere. Since in the first decades of the 21st century people mobility has reached very high levels worldwide, it seems interesting to distinguish 6 See also for the gentrification problem to Bryson and Wyckoff (2010), Casagrande (2016), or Zanini (2017). 7 For an analysis of the gentrification in different countries see also: Phillips (2005) in England, Stockdale (2010) in Scotland, Donaldson (2009) in South Africa, Van Criekingen (2009) in Belgium, Nelson and Nelson (2011) in USA, Gkartzios and Scott (2012) in rural Ireland.

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To proxy the closeness to a large city, the distance to the capital town of each of the three provinces (in kilometres) that comprise the region has been considered. This data is based on the distance by road and is calculated in the Statistical Office of Generalitat Valenciana. The variables that capture the economic situation of each municipality make reference to the number of operating firms per thousand inhabitants, which the Spanish Statistical Office collects in DIRCE and the Statistical Office of the regional government reports for each municipality. The sectoral specialization of each town is measured on the basis of the weight that jobs in agriculture, manufacturing, construction and services (this last category omitted in the regressions to avoid multicollinearity) as the Social Security reports. Using the number of actual jobs becomes a better reference of the work possibilities that each location may offer, since they will differ in size and, more importantly, towns may have jobs in some sectors although the firms are registered in another place. Another measure of the economic activity is the investments that each local government carries on. The variable public investment per inhabitant measures the average investment per inhabitant that the local government has effectively done (data are not from the budgeted figures but from the actual expended ones) in the previous five years (2007–2011) to the analysed period. This data are reported by the Spanish Ministry of Economy which is in charge of monitoring the activities of local governments. This variable will capture both additional investments that the municipality has developed as well as the necessary resources the municipality dedicates to keep updated and maintained the local infrastructure under study. Finally, to proxy the income per inhabitant, we use the figure that the regional statistical office reports for each municipality that is computed according the established standard methodology for sub-regional entities. As it commonly happens, it is not available for smallest municipalities given the needed input data.

those infrastructures linked to leisure activities and green areas (sports, parks and, in economic terms in the number of firms) although they are not statistically significant.8 Concerning the differences according the growth in the number of immigrants in each municipality (Table 2), we can see that municipalities that increase more their number of immigrants (relative to total population) have an economic structure more focused to agriculture and manufacturing vs. construction and services (that were the ones more affected by the crisis), as well as the average income. With the exception of parks, other elements as cultural or sport centers do not exhibit statistically significant differences. As it happens with the total population growth, distance seems to be an important factor, although the difference is not so large (on average 5 km vs. 19 for the total population change). Table 3 reports the correlation of all the variables that will be included in the econometric model. As we can see, the correlation among between each pair of variables is low. The only relative exceptions are the endowment of cultural installations and sport venues which in many cases in smaller towns go together in the form of community/ social centers and the disposable income per inhabitant and the distance to the capital town with a negative sign reflecting that those towns that are further the provincial capital exhibit a lower income. 4.2. Econometric analysis Results of regressions for the model, in Table 4, reveal interesting features of municipalities according their population increase in the analysed period. The first result we can see is that growth is not determined that by the previous size, and that factors related to the local infrastructure that affect to the life quality (cultural centers, sport centers, parks) is not statistically significant of the population change, the only exception being the number of parks, in smaller towns. Meanwhile, the economic situation, as well as the distance to the province capital town, are the two most relevant factors. Concerning the economic situation, we find that the more concentrated are the jobs in manufacturing and in agriculture the more the population increases. As we know, the 2008 financial crisis hit most to the construction sector, as well as to the service sector; besides some authors have raised that the manufacturing sector has exhibited a stronger resilience to the crisis (Holl, 2018), which in this case would also be transferred to the population growth of the towns. Meanwhile, other authors have observed that certain economic specializations, such as services in some areas of the west of the U.S., are an appeal for population growth (Shumway & Otterstrom, 2001). In the same vein, those towns with a larger disposable income are the ones that have increased most their population, being this effect specially import among the smallest ones. As we can see, this perspective of the economic situation becomes more important that the number of firms, which is not surprising since the number of firms is not directly linked to jobs as firms will be register in one town but may have working centers in different places. Finally, the distance to the capital town of the province exhibits a negative and significative sign both in large as well as in small municipalities. At a certain extent, these results may explain the lack of significance of those variables that capture life quality since proximity provides those services (cultural, sport, etc.). The results of Table 5 refer to the same model but related to the change of population that comes from another town (whether is from CV, other parts of Spain or abroad). This variable captures better the appeal of the town, since this part of the population is more moveable and is less linked to the municipality, so the inertia (due to familiar or personal linkages with other inhabitants, affection to the town, etc.) will be smaller. As we can see, the results for those indicators those proxy life quality (cultural and sport centers, parks) are not statistically

4. Empirical analysis 4.1. Descriptive analysis As it was stated in the introduction, population decrease is a constant in a large part of Spain and the case of CV can be representative of this trend. As we can see in Fig. 1, with a long perspective those municipalities in the North-East of the region as well as in the West (the interior) exhibit a historical trend towards depopulation. This fact is a constant in time and the more detailed analysis for recent times confirms that an important number of municipalities remain losing population. A more detailed look to the evolution of population in the recent years across the 543 municipalities of the Comunidad Valenciana is shown in Fig. 2. It shows the kernel estimation of the population changes in 2012–16. The first panel reports the total change in population while the second one refers to the number of people that were attracted to them, this is only the result of people that move to/from them. The presented figures show that, on average, municipalities lost −5.7% of their population in 2012–16. This figure shows a non-symmetrical distribution where more municipalities lost population that gained it. Meanwhile, the population change due to immigration (in relation to the number of inhabitants) is clearly positive, with an average level of 17.6% in this period and quite more symmetrical in municipalities with a growth over/below the average. Concerning the values of the explanatory variables, we can see in Table 1 that the differences supported by statistical tests between municipalities that increase and decrease their population is observed in the distance to the provincial capital town (on average municipalities that lose population are further away from the capital than those that increase it) and with an income per inhabitant significantly smaller and the sector structure. Other differences can be seen in terms of some of

8 Recently Carlino and Saiz (2019) have found empirical evidence in favour of economic growth of neighbourhoods that were close to central recreational districts.

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Fig. 1. Long term trend to lose/gain population on municipalities of CV along 1986–2017. Note: The names are the ones of the traditional counties along the CV. Source: Hermosilla, Fansa, and Aparicio (2018) with data of Instituto Valenciano de Investigaciones Económicas

significant). On its part, the economic situation of the town presents a different situation. While the total population growth is larger in towns more focused on manufacturing and agriculture, the immigrant population growth is smaller in those towns. This reveals that immigrants increase more in those places where construction (a sector that has given jobs to many foreign immigrants given their skills and abilities) and services are more important. As it happens for the total population growth, a larger income remains being an attractive reason for immigrants. It is also remarkable that distance to the provincial capital town is not significant, which will indicate that for this part of the population, this is not a relevant factor. Summing up, we may say that quality of life infrastructure (such as cultural centers, parks, sport centers), that at a grand extent can be handled by local governments, is not a factor that promotes population growth. The most important reason is the economic situation, especially

the income and the economic structure: while for the total population those municipalities more concentrated in agriculture and manufacturing are the ones that increase most their population, the result for immigrants is the converse probably due to the kind of jobs these people seek. Finally, the closer the town is to the capital town of the province the more its population grows (which could explain the lack of relevance of local cultural/sport/… infrastructure or may be a trend to concentrate around those cities), which does not happen with the migrant population. 5. Discussion Although economic forces that have promoted changes in the geographical distribution of the population have been a constant along human history, during the last decades some of them have reinforced, 7

Cities 97 (2020) 102506

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Kernel density estimate

Density

0

0

2

2

4

Density

4

6

6

8

Kernel density estimate

-.4

-.2

0 crecpobl

.2

0

.4

.2

.4 .6 inmtott1216h

.8

1

kernel = epanechnikov, bandwidth = 0.0160

kernel = epanechnikov, bandwidth = 0.0159

Fig. 2. Total growth of the population 2012–16 (right) and total variation of immigrants 2012–16 (left). Table 1 Descriptive data. Source: Statistical Office of Generalitat Valenciana. All municipalities

Municipalities that reduce population

Municipalities that do not change population

Municipalities that increase population

Variable

# obs

Average

# obs

Average

# obs

Average

# obs

Average

Cultural inst.a Parks (gardens)a Sports inst.a Firmsa Distance to capital town (km) % of jobs in agriculture % of jobs in manufacturing % of jobs in construction Public investment per inhab. Disposable income per inhab.

516 512 543 526 540

4.98 1.64 4.25 893.68 56.37

425 419 450 432 446

5.0 1.5 4.0 847.2 59.4

2 2 3 3 3

1.36 1.90 0.78 1181.39 75.67

89 91 93 91 91

4.95 2.34 5.37 1104.80 40.93

543 543 543 543 324

11.69 11.50 9.95 559.35 16,211.48

450 450 450 446 258

12.1 11.3 10.1 545.2 15,820.3

3 3 3 3 2

5.5 14.1 17.1 1991.00 15,370.50

93 93 93 94 64

9.7 12.7 8.9 580.68 17,814.86

a

b

Hypothesis testb

Rejected

Rejected Rejected

Per 1000 inhabitants. Hypothesis test H0: Average of municipalities that decrease population = Average of municipalities that increase, at 95% confidence.

Table 2 Descriptive data. Source: Statistical Office of Generalitat Valenciana.

Variable a

Cultural inst. Parks (gardens)a Sports inst.a Firmsa Distance to capital town (km) % of jobs in agriculture % of jobs in manufacturing % of jobs in construction Public investment per inhab. Disposable income per inhab.

All municipalities

Municipalities that increase immigrants less than the average

Municipalities that increase immigrants more than the average

# obs

Average

# obs

Average

# obs

Average

516 512 543 526 540 543 543 543 543 324

4.98 1.64 4.25 893.68 56.37 11.69 11.50 9.95 559.35 16,211.48

296 288 313 298 309 313 313 313 310 187

4.9 1.3 3.9 840.7 58.5 13.5 13.8 10.1 509.6 15,638.0

220 224 233 228 231 233 233 233 233 137

5.1 2.1 4.7 962.9 53.5 9.3 8.4 9.8 625.5 16,994.2

Hypothesis testb

Rejected Rejected Rejected Rejected Rejected

a

Per 1000 inhabitants. Hypothesis test H0: Average of municipalities that increase immigrants below the average (17.6%) = Average of municipalities that increase over the average, at 95% confidence. b

generating in some areas strong trends to depopulate them. In Spain, a large part of the interior is subject to those forces and a large part of the territory is suffering an important depopulation. One of the consequences is that the remaining population has access to fewer services, which in turn reinforces depopulation. Besides, as forests or the

wilderness are abandoned, they lose part of its value and activities such as logging or massive farming of pigs or cows (with a large ecological impact) find a cheap location. In any case, we cannot forget that people linked to a territory usually have a local cultural and history that is being lost as those territories are becoming less populated. 8

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1 0.2095 0.4632 −0.0369 0.3918 0.2095 0.0165 0.1012 0.3346 −0.3447

1 0.2848 −0.0175 0.0788 0.0352 −0.0461 0.1169 0.2371 −0.0051

1 −0.0203 0.3223 0.0101 −0.0422 0.1088 0.3648 −0.0493

1 −0.0484 0.1770 −0.0439 −0.0670 −0.0042 −0.0448

1 0.0624 −0.0474 0.0278 0.2424 −0.4662

1 −0.1406 −0.1642 0.0451 −0.2916

1 −0.0404 0.0074 −0.0491

1 0.0275 −0.0957

1 −0.1215

1

Consequently, policies are being designed and developed in order to counteract, or at least mitigate, the forces that pulls population out of some parts of the territory. Those policies usually depart from nationwide (or even higher levels as the EU) plans although the phenomenon is far from being widespread. Then, a discussion emerges on which kind of policies are more adequate to counteract those forces that expel out population of some areas. On the one hand, some kind of policies and public services that address directly to the life quality of the population emerge directly as possible causes, which leads to the need to implement policies at the local level; on the other hand, income or the economic dynamism of one town is a clear magnet for population and the policies to affect them (via subsidies in income/corporation taxes, for example). Subsequently, the analysis presented in this paper will also focus to what government level has more possibilities to succeed in the policies to fight against depopulation. The results of this research have clear implications for all those involved in policies aiming to keep or attract population to rural areas like he one described. The most important one is that, given the current endowment of those infrastructures that improve the quality of life and amusement (cultural centers and similar venues, sport facilities, greenareas), local investments should not address to increase such venues. Neither the change in the whole population nor in the immigrants is related to them. Although in quite different frameworks, these results are, on a broad sense, different to the ones that papers such as Evans and Foord (2008) or Grodach and Loukaitou-Sideris (2007) for cultural activities, Friedman et al. (2004) on sport facilities, or Gough and Accordino (2013) on public gardens. On the contrary, those policies and investments that improve the economic situation (in terms of average income, job opportunities) will be quite more effective. In the same vein, as the distance has revealed to be a relevant factor (it conditions the access to health services, higher education, shopping malls or some leisure activities), all those investments that reduce the relevance of the distance (public transport services and/or infrastructures) will succeed in keeping the population in their municipalities. From all of that, another important contribution emerges for all those ones interested in policies to avoid depopulation: the responsibility cannot rely exclusively on local authorities and policies (as the marketing campaigns described by Nyedomysl, 2007 for Sweden) since most of the explanatory factors cannot be controlled nor influenced by local governments; this kind of policies require an strategy and involvement of national governments since actions such as income tax reductions (that increases the disposable income of the inhabitants), support to firms in certain sectors (via subsidies, tax deductions, preferential financial access, support to some of their activities, etc.) or just job creation cannot be implemented by small town governments. In any way, it is necessary to be cautious before to extend the conclusions of this research to another country and a careful analysis needs to be done in order to know whether the endowment of those facilities can be compared with the one of our study. 6. Summary and conclusions In this paper we analyse how some factors linked to life quality that local governments may manage and other ones that can be better managed at regional/national level are correlated with the population growth across the municipalities of Comunidad Valenciana in Spain. CV hosts about 10% of the Spanish population in a territory that is < 5% of the total. However, it is experiencing important population changes, with many of its municipalities losing population at a fast pace. Beyond the interest of the relevance of each specific factor, we can raise conclusions about the government level that is better fitted to design and implement policies to fight depopulation trends. We raise a model where the population changes depend on those amenities that local governments may implement (cultural centers, sport facilities, parks & gardens) and that previous studies have found

a

Per 1000 inhabitants.

1 −0.0435 0.0940 −0.0207 −0.0055 −0.3489 0.0355 0.1810 −0.0581 0.0707 0.3378 Pop. Growth 2012–16 Cultural inst.a Parks (gardens)a Sports inst.a Firmsa Distance to capital town % of jobs in agriculture % of jobs in manufacturing % of jobs in construction Public investment per inhab. Disposable income per inhab.

Parks (gardens)a Cultural inst.a Pop. growth 2012–16

Table 3 Descriptive data: correlation between the variables of the analysis. Source: Statistical Office of Generalitat Valenciana.

Sports inst.a

Firmsa

Distance to capital town

% of jobs in agriculture

% of jobs in manufacturing

% of jobs in construc-tion

Public invest. per inhab.

Disp. income per inhab.

F. Merino and M.A. Prats

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Table 4 Estimation for the population growth.

Population Popul. square Cultural centers Parks Sport centers # firms Distance % jobs agriculture % jobs manufacturing % jobs construction Public invest Disp. income Constant R2 # Obs

All municipalities

Municipalities > 10.000 inhab.

Municipalities < 10.000 inhab.

−6.55E−08 −(0.05) 9.91E−12 (0.31) 0.0044108 (1.62) 0.00575⁎ (1.89) −0.0007083 −(0.35) −4.12E−07 −(0.37) −0.000631⁎⁎⁎ −(4.01) 0.0642434 (0.06) 0.1015057⁎⁎⁎ (4.21) −0.0080156 −(0.18) 0.0000365⁎⁎ (2.01) 0.0000081⁎⁎⁎ (3.47) −0.1840471⁎⁎⁎ −(3.95) 0.2549 295

0.00000471 (1.16) −6.52E−11 −(0.96) 0.0166165 (0.33) −0.0048242 −(0.55) −0.0025625 −(0.34) 0.0002292⁎ (1.95) −0.0012822⁎⁎⁎ −(3.37) 0.2537052⁎⁎⁎ (2.63) 0.1644906⁎⁎⁎ (2.84) −0.1663992 −(1.07) 0.0000865 (0.89) 0.00000768⁎ (1.81) −0.2453634 −(1.61) 0.3623 84

0.000000517 (0.06) 5.97E−11 (0.08) 0.0050783 (1.48) 0.0062571⁎ (1.96) −0.0011069 −(0.57) −1.96E−07 −(0.18) −0.0004976⁎⁎⁎ −(2.82) 0.0440693⁎ (1.70) 0.0776679⁎⁎⁎ (3.36) −0.0069438 −(0.14) 0.0000318⁎ (1.76) 0.00000878⁎⁎⁎ (3.06) −0.197396⁎⁎⁎ −(3.78) 0.2578 211

All municipalities

Municipalities > 10.000 inhab.

Municipalities < 10.000 inhab.

5.46E−07 (0.46) −2.63E−11 −(0.91) 0.0027216 (0.75) 0.0052029 (1.45) −0.0033497 −(1.27) 0.00000166 (1.36) −0.0002148 −(1.52) −0.0957217 −(0.10) −0.1173982⁎⁎⁎ −(4.14) 0.0380163 (0.75) 0.000034⁎ (1.86) 0.00000704⁎⁎⁎ (3.74) 0.0771914⁎⁎ (2.15) 0.2176 295

0.00000322 (1.25) −8.12E−11 −(1.63) 0.0028893 (0.08) −0.0116661 −(1.27) −0.0104527⁎⁎ −(1.97) −0.0000909 −(0.89) −0.000045 −(0.24) −0.150693⁎⁎⁎ −(3.23) −0.2063459⁎⁎⁎ −(4.53) 0.1556847 (1.42) 0.00000624 (0.08) 0.00000725⁎⁎⁎ (3.66) 0.0647697 (1.15) 0.4869 84

−0.0000061 -(0.59) 7.82E−10 (0.75) −0.0020771 −(0.44) 0.0045912 (1.30) 0.002378 (0.81) 0.00000127 (1.17) −0.0001274 −(0.64) −0.0511472⁎⁎ −(2.01) −0.0867797⁎⁎⁎ −(2.98) 0.0313424 (0.76) 0.0000125 (0.62) 0.00000437⁎⁎ (2.10) 0.1337324⁎⁎⁎ (2.84) 0.1298 211

Notes: OLS estimation, heteroskedasticity robust; t-ratios in parenthesis. ⁎ Statistical significativity at 90%. ⁎⁎ Statistical significativity at 95%. ⁎⁎⁎ Statistical significativity at 99%. Table 5 Estimation for the immigrant growth.

Population Popul. square Cultural centers Parks Sport centers # firms Distance % jobs agriculture % jobs manufacturing % jobs construction Public invest Disp. income Constant R-squared # Obs

Notes: OLS estimation, heteroskedasticity robust; t-ratios in parenthesis. ⁎ Statistical significativity at 90, 95 and 99% respectively. ⁎⁎ Statistical significativity at 95%. ⁎⁎⁎ Statistical significativity at 99%. 10

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relevant in other countries as well as the economic situation of each town (average income, productive specialization) and some control variables. Given that there might be a different population dynamism among native people and those that were immigrants (born in a different place, whether in the rest of Spain or abroad), we estimate two different models for each group of population. Our results show that those endowments that may affect life quality do not seem to affect to the population growth, being the ones linked to the economic situation (income and economic specialization in manufacturing and, at a certain extent in agriculture) the most important ones as well as the distance to the capital city of the province. Results for immigrants share the same perspective although with some remarkable changes: the role of local endowments remains being nonsignificant and the economic situation is also the most important factor, although istead of being manufacturing the sector that attracts population, services emerges as the sector that is more important; for this group of people, the role of distance is negligible, which may indicate that the complementarities (both as supplier of goods and services as well as places where to find jobs) that the capital city provides for the total population living in towns are not relevant for the non-native people. These results have clear implications both on the topic of fighting against depopulation as well as on the case of Southern Europe. The literature and policies on this issue have raised that some tools like increasing local infrastructure that improves the life quality of its inhabitants may be helpful to uphold or attract the population in rural areas; meanwhile, the possibility to increase the appeal of smaller municipalities by means of increasing the income (as it could be done by means of lower personal income taxes) or promoting some specific economic sectors (by certain policies that attract firms) has also been raised. The analysis we present in this paper shows the value to develop this kind of joint analyses not only for the targets of those policies, but also because each kind of policies will be better developed by different government levels. According the results, we can determine whether this should be a policy handled locally or regionally/nationally. Our results proof that the economic situation of each town is the most relevant factor, so the policies aiming to counteract depopulation forces should focus on economic factors (such as the income, the economic activities, etc.) instead of the local quality of life infrastructures. Consequently, this policy cannot be a local one, but a regional/national one since the tools to increase inhabitants' income or the economic structure can hardly be managed at local level. Beyond that, these results have implications on the economic literature on economic growth too. On the one hand, we have shown that, once a certain level of quality of life public infrastructures is available, a larger endowment does not increase the appeal of those municipalities to live in, and economic factors become the most relevant one. On the other hand, we have shown how the institutional design (which government level is in charge of this goal) becomes relevant to uphold population at local level, which is a key element for economic growth.

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Declaration of competing interest None. Acknowledgements We acknowledge the financial support from Spanish Ministry of Economy and Competitiveness and European Regional Development Fund, through the project ECO2015-65826-P. References Abercrombie, N., & Urry, J. (1983). Capital, labour and the middle classes. London: Allen and Unwin. ACIR, Advisory Commission on Intergovernmental Relations (1991). Interjurisdictional tax

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