Places facing demographic change can support high levels of well-being by leveraging local assets and matching services such as healthcare and education with population needs. Demographic change can also be an opportunity to promote social innovation, digitalisation, and new technologies for better service provision. Shrinking regions can reduce environmental impacts and contribute to meeting global environmental targets on biodiversity, climate change and the degradation of land.
Demographic change in regions and cities
Many places in the OECD face declining and ageing populations. This trend will continue. 14 OECD countries are expecting to lose population by 2040. In some regions this trend will be lasting and strong, with some projected to lose 20% or more of their population by 2050. Strong population shrinkage brings challenges that are best addressed at the regional and local level. For example, the costs of services and infrastructure provision rise per person, while quality and access risks declining. Affected regions typically struggle with labour and skill shortages, deteriorating real estate values, eroding tax bases and vacant buildings. The effects vary across regions: while people often migrate from rural to urban regions, some cities and towns are also affected by population decline. Local policies, delivered with national support, are necessary to foster well-being, economic and environmental sustainability. They need to cover government finances, infrastructure and service provision as well as multilevel governance.
Key messages
Newly built-up land should correspond to population projections. In regions expected to shrink, efforts should be made to repurpose developed land, rehabilitate well-connected areas and demolish unused buildings if necessary. In areas expected to grow, especially near the outskirts of urban centres, efforts need to be made to build “up”, and not “out” where possible and concentrate development near public transit corridors.
The challenges associated with demographic change go beyond administrative boundaries. Cooperation across local and regional governments is needed to consolidate public services and bring down costs. Governments and policy departments at several levels need to work together to address regional disparities and prevent a race to the bottom that can result from unnecessary competition between subnational authorities.
Context
Depopulation occurs amidst urban concentration
From 2000 to 2020, the population in cities rose by 24%, but only by 8% in towns and semi-dense areas, and by 6% in rural areas. Projections show a 5% increase in the urban population by 2030 compared to 2020. In contrast, the population in rural areas is projected to grow by only 1%. In towns and semi-dense areas population is expected to decrease.
Many OECD regions face challenges associated with an ageing society
An ageing population strains healthcare and other public services, necessitating policy reforms and age-friendly investment in services and infrastructure. Almost all OECD Functional Urban Areas (FUAs) have seen the share of people aged 65 years and more increase. On average, across OECD countries, FUAs that lost population in the 2008 to 2018 period experienced an increase of 4% in the share of population aged 65 years and over, compared to an increase of 2.7% in metropolitan areas with a growing population.
Low-density development is unsustainable
When development is spread out, it results in more carbon emissions from vehicles because people have to use cars more and travel longer distances. Such spread-out areas are also hard to provide with efficient public transport. Moreover, this kind of development can harm biodiversity and reduce the land available for forests or to produce food. Depopulating regions also need to anticipate upcoming climate change hazards.
Past events
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