Work

The consequence of urban shrinkage: Investigation on the local fiscal revenue

Year: 2025

Type: article

Abstract: Previous research on urban shrinkage has primarily focused on conceptual development and identifying underlying drivers. This paper seeks to extend this foundation by proposing a comprehensive analytical framework, grounded in a review of relevant literature, to examine the fiscal implications of urban shrinkage. Specifically, we explore the impact of population decline, a defining characteristic of urban shrinkage on local fiscal revenues. Applying our framework to the context of Japan , we discover that urban shrinkage significantly deteriorates local fiscal revenues, particularly affecting building taxes . However, the heterogeneity shows that the impact of shrinkage on land tax and depreciated assets tax appears to be less pronounced. This study enhances our understanding of the fiscal consequences of urban shrinkage and offers valuable insights for policy-making at the local government level.

Source: Regional Science Policy & Practice

DOI: 10.1016/j.rspp.2025.100188

Authors: Jian Wang, Lechao Zhang, Kefu Lin

Institutions: Shanghai University, Kanagawa University

Language: English

Topic: Urbanization and City Planning

Subfield: Urban Studies

Field: Social Sciences

Domain: Social Sciences

SDG: Sustainable cities and communities

Open Access status: gold

Estimated APC paid: $1,596