Many rural areas are losing population fast, putting pressure on local services. With fewer people to staff, use and pay for these, small facilities often struggle to stay open. At the same time, people may be migrating out of places because they cannot access the services they need. Could boosting service provision help break this vicious cycle of decline?
Regional centres as service hubs, yet not immune to population decline
Our new report uses geospatial data to map access to pharmacies, schools, banks, hospitals and universities. It sheds light on the important role of regional centres (the largest settlements within a 30-minute drive), which offer more services than other settlements of comparable size. Co-locating services in these centres and improving access to them makes rural service delivery more efficient.
By contrast, towns and villages near a city tend to have fewer services. For example, only a third of towns less than 30 minutes away from a city by car have a hospital, compared to 78% of towns that are regional centres and 47% of other towns more than 30 minutes away from a city. Towns near a city also have fewer banks, pharmacies, and schools. This is logical – towns far from cities serve as service hubs for their own and nearby populations, while towns close to cities tap into the services offered by those cities.
Getting close to the action
Yet our data show that the access to services offered by regional centres provides little protection against population decline. European villages more than 30 minutes away from a city that act as regional centres saw an average population decline of close to 2% between 2011 and 2021, threatening their ability to continue to sustain vital services. Meanwhile, small settlements near cities often saw their population increase: villages with access to a city grew by 4.5%, even outpacing population growth in cities themselves.
These population shifts are also reflected in house prices: towns and villages near cities are considerably more expensive but on average people do not pay more to live in a regional centre compared to other settlements far from a city.
Getting size right
The declining popularity of regional centres may be partly explained by the improved availability of digital tools. For example, about three in four internet users in OECD countries use internet banking and online government services. Accessing these – and other – services online can significantly reduce the need for physical access to services. The rise of artificial intelligence also brings numerous new digital alternatives.
However, regional centres, and the physical services and centres they provide will remain vital to supporting the quality of life of some residents. People who struggle with longer travel, such as the old-age and infirm, often find digital alternatives hard to use. And even those comfortable with digital services still need physical access for things like childcare or physiotherapy. Adequate transport options need to be available in rural areas to ensure vulnerable groups can reach these centres – for example through flexible, on-demand transport. For example, the Spanish region of Castilla y León has implemented transport on demand services in rural areas, which is available to 70% of the population.
Small, but beautiful
As the demographic tide turns, widespread population ageing and decline will mean many if not most regional centres will continue to shrink – in spite of efforts to support struggling services.
Instead of swimming against the tide, let’s commit to making small beautiful.
This means focusing on accessible local services, such as primary schools and health care, while introducing cost-effective solutions like digital and mobile alternatives. Specialised services can be consolidated in fewer regional centres with on-demand access to balance accessibility and efficiency. Additionally, innovative approaches to public transport in low-demand regions can improve connectivity. Through these measures, policymakers can help places shrink smartly – and remain communities that people are proud to call home.
Bernhard Nöbauer is a Junior Economist in the Economic Analysis, Data and Statistics Division of the Centre for Entrepreneurship, SMEs, Regions and Cities. His work focuses on housing costs, accessibility to services, and the population distribution across space and time. He uses geospatial data to answer questions related to these and other topics in urban and regional economics. Bernhard holds a Masters in Economics from Sciences Po Paris and a PhD in Economics from the University of Lausanne.
Ana Isabel Moreno Monroy is the Acting Head of the Territorial Statistics and Analysis Unit at the Centre for Entrepreneurship, SMEs, Regions and Cities at the OECD. Previously she worked as a Visiting Assistant Professor at the Autonomous University of Barcelona, and as Marie Sklodowska Curie Fellow at the Rovira i Virgili University and the London School of Economics. In her research she uses geo-spatial data and economic and geography methods to contribute to the design of social inclusion policies. She has published in leading academic journals including the Journal of Development Economics and the Journal of Urban Economics. Ana owns a Masters and a PhD in Economics from the University of Groningen.
Marc Bournisien de Valmont is a Policy Analyst in the Regional Development and Multi-level Governance Division in the OECD Centre for Entrepreneurship, SMEs, Regions, and Cities. He coordinates the OECD project “Shrinking Smartly and Sustainably” on demographic change and works on service delivery in rural areas, regional attractiveness, and cross-border regions.
Marc holds a Master’s degree in InternationalRelationsand a Bachelor’s degree from Sciences Po Paris.Prior to joining the OECD, Marc has worked as a Research Fellow for the think-tank Institut Montaigne and as an Analyst at the French Ministry of Defense.