How Did Fiscal Consolidation of Izumisano City Affect the Population ?

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  • OGAWA Ryoh
    Graduate School of Economics, Osaka City University
  • KIMURA Shin
    Graduate School of Simulation Studies, Hyogo University

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  • 泉佐野市の財政健全化への取組みが人口にどのような影響を与えたのか
  • イズミサノシ ノ ザイセイ ケンゼンカ エ ノ トリクミ ガ ジンコウ ニ ドノ ヨウ ナ エイキョウ オ アタエタ ノ カ

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<p>How does a local government’s fiscal consolidation affect the population ?　This paper provides a case study of Izumisano City, where there has been a long-term attempt to improve fiscal conditions.　The economy and financial sector of Izumisano City have previously faced shocks from two fiscal crises.　The first was the spontaneous declaration of a fiscal emergency at the end of FY2003, and the second was the forced designation by the central government of a “fiscal consolidation municipality” in FY2009.　These crises led the city to make new plans for fiscal consolidation.　The analysis presented in this paper confirms that the benefit-cost ratio of public service provisions declined in the fiscal year following each of the two crises, relative to two groups of similar municipalities.</p><p>Using population data from the Japanese basic resident register, three features of population changes due to the two fiscal crises were identified:（1） the rate of net migration decreased relative to similar municipalities, （2） immigration was more responsive to the crises than emigration both in rate and timing of change, （3） the previous trends of larger population increases in younger generations compared to similar municipalities disappeared under stronger fiscal consolidation.</p><p>Special mention should also be made of the finding that the decrease in the immigration rate occurred prior to decline in the benefit-cost ratio that was clearly observed in forced designation as a “fiscal consolidation municipality” in FY2009.　This result shows an announcement effect:the designation by the central government influenced the actions of potential immigrants prior to the negative policy impacts were felt, leading to avoidance of immigration to Izumisano before the fiscal consolidation was strengthened.</p><p>The question posed by this analysis is to what extent the two fiscal crises reduced the population growth in Izumisano City.　The results of the shift-share analysis, controlling for differences in age composition between the regions, shows that the two fiscal crises reduced the population growth rate by 0.2 to 0.5 percentage points per year.</p><p>JEL Classifications: H31, H72, R23</p>

Journal

  • Studies in Regional Science

    Studies in Regional Science 46 (3), 309-323, 2016

    JAPAN SECTION OF THE REGIONAL SCIENCE ASSOCIATION INTERNATIONAL

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