When Fewer People Looks Like Better Finances
In many small towns, public finances seem to improve at exactly the moment things are getting worse.
Fewer residents… but higher spending per person.
Fewer people… but more revenue per inhabitant.
At first glance, this sounds like good news. But our research shows the opposite: in many shrinking municipalities, these “improvements” are largely an illusion. Across Spain—and in many other countries—rural areas are steadily losing population. This trend is often discussed as a social or demographic problem. But it also has a less visible consequence: it changes how we measure and interpret the financial health of local governments.
The Social and Fiscal Consequences of Urban Decline
Most big cities grow, but a handful of once-large American cities continuously shrink. Twenty-one of the 110 largest central cities in the US have lost population every decade since 1980. Once centers of wealth and industry, these places are shadows of their former selves. In 1950, 1.8 million people lived in Detroit; in 2013, 700,000 did. Since 1950 Buffalo, New York has lost 55 percent of its population. Cleveland, Ohio has lost 56 percent, and Youngstown, Ohio has lost 61 percent.