The impact of infrastructure investment on migration from rural islands

Abstract

This paper explores the impact of infrastructure investment on migration from rural areas, where the population size in many cases is falling. To explore this, we examine eight rural islands where bridges and tunnels (fixed links) have replaced ferry connections. Fixed links offer a substantial reduction in travel time, as well as enabling the analysis to isolate and assess their impact. We estimate the effects on the population on the islands using a difference-in-difference approach, with islands without fixed links as control units. Using changes in accessibility to the nearest town as the explanatory variables, we estimate that a percentage change in accessibility to the nearest island increases the population size by 0.3 percent. The effects are close to zero immediately, while the rest builds up over a period of at least 15 years. On average, the estimated effect on the island population seems to be approximately what is needed to avoid a declining population. Keywords: fixed links, transport investment, migration, difference-in-difference