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Relocating to Peripheral Cities: Development and Diversity From Relocating Government Jobs

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  • Peter Sandholt Jensen
  • Torben Dall Schmidt
  • Jens Fyhn Lykke Sørensen

Abstract

The local labor market effects of relocating central government jobs to cities in rural municipalities is investigated by considering two small‐scale interventions by the Danish government in the mid‐2000s. We leverage the Synthetic Control Method to compare the two affected municipalities to a synthetic counterfactual. Results show that relocating central government jobs: (1) increased government employment; (2) had no impact on private employment; and (3) had little impact on diversity even if (1) and (2) suggest otherwise. These results add new insights into the effects of small‐scale relocations relative to previous contributions.

Suggested Citation

  • Peter Sandholt Jensen & Torben Dall Schmidt & Jens Fyhn Lykke Sørensen, 2026. "Relocating to Peripheral Cities: Development and Diversity From Relocating Government Jobs," Journal of Regional Science, Wiley Blackwell, vol. 66(3), pages 830-843, June.
  • Handle: RePEc:bla:jregsc:v:66:y:2026:i:3:p:830-843
    DOI: 10.1111/jors.70040
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