Employment, Transport Infrastructure, and Rural Depopulation: A New Spatial Equilibrium Model

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.