The Depopulation Problem
The depopulation problem in Japan is considered from the viewpoint of local public goods equilibrium. If in moving from one region to another migrants do not account for the effect of their moving on the other residents, then one region may be overpopulated and the other underpopulated. In the framework of a simple model, it is suggested that the central government may be justified in using a system of intergovernmental grants to overcome these inefficiencies. In order to confirm the role of intergovernmental grants, the model is applied to a village which is designated as a depopulated area. Furthermore, the effects of the countermeasures taken for about 40 years since the first depopulation law was implemented are investigated. In the final section, it is pointed out that there is a need to take into account another situation: there are areas which are similar to depopulated areas, but are not designated as such under the law.
KeywordsDepopulation problem Intergovernmental grants Migration Inefficiency of population allocation
We gratefully acknowledge the helpful comments on earlier drafts by S. Mahay, W. Jarvie, M. M. Hufschmidt, and F. H. Bollman. A part of this chapter has originally published in Regional Studies, 25(2), pp. 163–172. We would like to thank the publishers for their permission to use the material here.
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