Scandinavian Working Papers in Economics

Discussion Papers,
Norwegian School of Economics, Department of Business and Management Science

No 2013/9: Employment, transport infrastructure and rural depopulation: a new spatial equilibrium model

David Philip McArthur (), Inge Thorsen () and Jan Ubøe ()
Additional contact information
David Philip McArthur: Dept. of Health Management and Health Economics, University of Oslo, Postal: University of Oslo, Department of Health Management and Health Economics, Postboks 1089 Blindern, 0318 Oslo, Norway
Inge Thorsen: Dept. of Economics, Stord/Haugesund University College, Postal: Stord/Haugesund University College, Department of Economics, 4028 Haugesund, Norway
Jan Ubøe: Dept. of Business and Management Science, Norwegian School of Economics, Postal: NHH , Department of Business and Management Science, Helleveien 30, N-5045 Bergen, Norway

Abstract: In this paper we propose a new spatial equilibrium model, and use it to discuss issues related to rural depopulation. The discussion focuses on how investments in transport infrastructure and the spatial distribution of basic sector jobs can promote a relatively balanced growth of peripheral and central areas of a region. Through interdependencies in individual migration decisions and an economic base multiplier mechanism, negative exogenous shocks may take a peripheral zone beyond a bifurcation point, into an equilibrium of dramatically lower population and employment. We study how the location of bifurcation points depend on spatial interaction behavioural parameters and variables subject to regional policy. We also discuss the issue of the timing of interventions intended to prevent a process of rural depopulation.

Keywords: Employment; transport infrastructure; rural depopulation; spatial equilibrium model

JEL-codes: R00; R10

29 pages, September 16, 2013

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