Shrinking Smartly and Sustainably

Many OECD countries are facing population decline and ageing, with these trends set to continue in the coming decades. However, these trends, and their effects, can differ markedly across space within countries. Urbanisation, for example, is increasing in most economies as people migrate from shrinking rural areas, yet even in urban areas, about one in five are also shrinking. These complexities pose challenges for policy makers at all levels of government, especially for depopulating places, where labour and skills shortages, lowering economies of scale for service provision, and eroding tax bases put increasing pressure on local development. Addressing these challenges requires a multi-level governance approach, looking across a wide range of policy areas, including the public finances, infrastructure, spatial planning, land use, social cohesion and service delivery. At the same time, policies should be tailored to the needs, challenges and opportunities of each region, combining effective adaptation strategies with efforts, including on attractiveness, to mitigate demographic decline. This report provides a comprehensive policy framework to support policy makers in responding to demographic change, helping them design and implement place-based strategies that foster resilience, inclusiveness and long-term sustainability.