Uni e si y o Minho
School o Economics and Managemen
F ancisco Figuei a Ribei o
Should I s ay o should I go?
An analysis o Po ugal’s in acoun y mig a ion.
ap il 2025
Uni e si y o Minho
School o Economics and Managemen
F ancisco Figuei a Ribei o
Should I s ay o should I go?
An analysis o Po ugal’s in acoun y mig a ion.
Mas e ’s Disse a ion
Mas e in Economics
Disse a ion supe ised by
P o esso a Dou o a Linda Veiga
ap il 2025
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i
Acknowledgemen s
The comple ion o his disse a ion was made possible hanks o he suppo and con ibu ion o many
people, o whom I exp ess my deepes g a i ude.
I would i s ly like o ex end my g a i ude o P o esso Linda Veiga, o he in aluable guidance, suppo ,
knowledge and oppo uni ies along he de elopmen o his disse a ion. Thank you o he pa ience and
mo i a ion.
I am also g a e ul o all he eache s I ha e had he p i ilege o lea ning om. A special hank you o
my iends, pa icula ly Ped o Machado and F ancisco Cabelei a, wi h whom I ha e sha ed his academic
jou ney wi h since day one. You suppo , insigh ul discussions, and iendship o e he las i e yea s
ha e mean he wo ld o me.
Las ly, my deepes app ecia ion goes o my pa en s and sis e s o hei endless lo e, pa ience and
encou agemen , allowing me o pu sue my s udies. You unwa e ing suppo has made his jou ney
possible, and o ha , I am o e e g a e ul.
ii
S a emen o In eg i y
I he eby decla e ha ing conduc ed his academic wo k wi h in eg i y.
I con i m ha I ha e no used plagia ism o any o m o undue use o in o ma ion o alsi ica ion o esul s
along he p ocess leading o i s elabo a ion.
I u he decla e ha I ha e ully acknowledged he Code o E hical Conduc o he Uni e si y o Minho.
Uni e si y o Minho, B aga, ap il 2025
F ancisco Figuei a Ribei o
iii
Abs ac
Popula ion lows ha e led o an une en dis ibu ion o Po ugal’s popula ion and ce ain municipali ies and
egions ha e become mo e de eloped han o he s. This s udy in es iga es which ac o s in luence he
a ac i eness o a municipali y. The empi ical analysis uses a panel da a se o Po uguese mainland
municipali ies om 2007 o 2023, es ima ing ixed e ec s and andom e ec s eg essions. Municipal ne
mig a ion se es as dependen a iable, while local go e nmen iscal policy, socioeconomic and ameni y
a iables as independen a iables. The analysis ound ha while ce ain socioeconomic ac o s in luence
mig a ion pa e ns, mos ly hose ega ding he labou ma ke , local go e nmen ’s iscal policy and ameni-
ies did no exhibi a s a is ically signi ican impac . This may sugges he e is a local go e nmen s’ lack
o in luence due o he high deg ee o cen aliza ion o s a e ac i i ies in Po ugal.
Keywo ds In e nal Mig a ion; Ne Mig a ion; Po uguese Municipali ies; Tiebou Model.
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Resumo
Os luxos populacionais conduzi am a uma dis ibuição desigual da população em Po ugal e alguns mu-
nicípios e egiões o na am-se mais desen ol idos do que ou os. Es e es udo in es iga quais os ac o es
que in luenciam a a a i idade de um município. A análise empí ica u iliza um conjun o de dados em
painel dos municípios de Po ugal con inen al de 2007 a 2023, es imando eg essões de e ei os ixos e
de e ei os alea ó ios. O saldo mig a ó io municipal se e como a iá el dependen e, enquan o as a iá eis
socioeconómicas, polí ica iscal do go e no local e comodidades são a iá eis independen es. A análise
concluiu que, embo a alguns a o es socioeconómicos in luenciem o saldo mig a ó io, p incipalmen e os
elacionados com o me cado de abalho, a polí ica iscal e as comodidades locais não i e am um im-
pac o es a is icamen e signi ica i o. Is o pode indica a pouca capacidade de in luência dos go e nos
locais dado o ele ado g au de cen alização das a i idades do Es ado em Po ugal.
Pala as-cha e Mig ação In e na; Saldo Mig a ó io; Munícipios Po ugueses; Modelo de Tiebou .
Con en s
1 In oduc ion 1
2 Theo e ical F amewo k 3
2.1 Mig a ion....................................... 3
2.2 Tiebou Hypo hesis.................................. 7
2.3 Empi icalS udies................................... 8
3 The Po uguese Case 16
3.1 Ins i u ionalF amewo k................................ 16
3.2 Gene al socio-economic con ex . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.3 Local go e nmen policy ac ion o a ac popula ion . . . . . . . . . . . . . . . . . . 24
3.3.1 Municipali y o São João da Pesquei a . . . . . . . . . . . . . . . . . . . . 25
4 Da a and Desc ip i e S a is ics 31
4.1 Da a and Desc ip i e S a is ics . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5 Empi ical F amewo k 35
5.1 Es ima ionS a egy.................................. 35
5.2 Baselinemodel.................................... 36
6 Empi ical Resul s 38
6.1 Baselinemodel.................................... 38
6.2 Fi e-yea pe iodmodel ................................ 42
7 Conclusion 45
Bibliog aphy 47
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2 Theo e ical F amewo k
The p ospec s o a egion o place ha e always been closely ied o i s demog aphic s uc u e. Demo-
g aphics play a decisi e ole in shaping decisions made by cen al go e nmen s and businesses ega ding
esou ce alloca ion. This is why mig a ion lows a e so impo an o a egion’s economic, social and
ameni y de elopmen , in his line egional policy has been conside ed i al o a ac mig an s, h ough he
p omo ion o a egion o place (Rod íguez-Pose and Ke e e , 2012; Niedomysl, 2004). To p e en majo
popula ion shi s, local go e nmen s mus ensu e hei e i o ies ha e good le els o economic ac i i y,
businesses, in as uc u es, se ices and ameni ies o s abilize hei popula ion le els and imp o e he
e i o y’s a ac i eness. While ameni ies ha e been conside ed o assume a ele an ole in he appeal o
places in he Uni ed S a es, he ole o economic ac o s has been p edominan in Eu ope (Rod íguez-Pose
and Ke e e , 2012; Faggian e al., 2012). While local go e nmen s h ough public goods, se ices, ax and
expendi u e ha e also been conside ed ele an in in luencing loca ion decisions (F iedman, 1981; Day,
1992; Wes e lund and Wyzan, 1995; Dahlbe g e al., 2012).
F om a mic oeconomic pe spec i e, households/indi iduals ha e always been conside ed o maximise
hei u ili y unde a budge cons ain , aking in o accoun bo h economic and non-economic aspec s. While
economic aspec s o en include expec ed income a iables such as wages, unemploymen a es and local
ax a es. Non-economic include, na u al and man-made ameni ies and public se ices (Faggian e al.,
2012). The ollowing wo sec ions p esen a heo e ical backg ound, on local go e nmen s and mig a ion
and he hi d sec ion on he main empi ical s udies.
2.1 Mig a ion
The s udy o mig a ion by economis s has been mainly spli in o indi idual choice models and models
o spa ial equilib ium and op imal dynamic mig a ion (Jia e al., 2023). Indi idual choice models s a ed o
conside he indi idual’s decision o mig a e unde a cos -bene i amewo k, people choose o mo e whe e
hei u u e s eam o bene i s (mos ly wages) is maximised. S ill, hey incu cos s o a elling, inding wo k,
3
lea ning a new language and cul u e, and emo ional a achmen (Sjaas ad, 1962). Inco po a ing hese
analy ically and ea ing mig a ion as an in es men (simila o human capi al in es men ), he indi idual
decides o mo e om loca ion i o ji he ea nings and cos di e en ials o e space a e maximised and
posi i e (Sjaas ad, 1962). Le he p esen alue o ea nings s eam in place jless han hose in ibe:
n
∑
=1
(Ej −Ei )
(1 + ) ,(2.1)
whe e is he discoun a e and E he ea nings in each loca ion.
And he p esen alue o ne cos s be ween hese wo places is:
n
∑
=1
(Cj −Ci )
(1 + ) ,(2.2)
C s ands o cos s in each loca ion.
Then he p esen alue o he in es men in mig a ion om i o jis:
PVij =
n
∑
=1
Ej −Ei
(1 + ) −
n
∑
=1
Cj −Ci
(1 + ) .(2.3)
Kennan and Walke (2011) ex ended indi idual choice models h ough a s uc u al dynamic model,
ocusing on he ela ionship be ween income p ospec s and mig a ion decisions. Indi idual mig a ion
decisions a e based on an op imal sea ch p ocess, eac ing o wage di e en ials ac oss loca ions, by
maximizing he expec ed li e ime income ne o mo ing cos s (Jia e al., 2023). Illus a ed in he nex
equa ions, he e a e Jloca ions, lbeing a ec o o ecen loca ions and l0 he cu en loca ion, ωa ec o
wi h in o ma ion on wage and u ili y in each loca ion, s a e ec o xconsis ing o l,ω, and age. ζjbeing
a andom a iable independen and iden ically dis ibu ed ac oss loca ions, pe iods and indi iduals and
independen o s a e ec o (Jia e al., 2023). Accoun ing o ecen loca ions is he ec o l, accoun ing
o wages wis a ec o o wages and u ili y in o ma ion ac oss loca ions. Fo indi iduals whose home
loca ion is h he low payo is:
˜uh(x, j) = uh(x, j) + ζj,(2.4)
whe e
uh(x, j) = α0w(ℓ0, ω) +
K
∑
k=1
αkYk(ℓ0) + αHχ(ℓ0=h) + ξ(ℓ0, ω)−∆τ(x, j).(2.5)
The i s e m w(ℓ0, ω)in equa ion 2.5 ep esen s wage in he cu en loca ion (l0), he second e m
Yk(l0)consis s o non-pecunia y a iables (ameni ies) and he hi d he p e e ence o he na i e loca ion
χ(ℓ0=h). Then ξis a andom pe manen componen in each loca ion, which is lea ned when he
4
loca ion is isi ed. The e m ∆τ ep esen s he mo ing cos om l0 o ljand a unexplained componen
ζj, cap u ing shocks o p e e ences o mo ing cos s (Jia e al., 2023). Las ly mo ing cos s (2.6) a e
unc ion o dis ance D(ℓ0, j) om he cu en loca ion o j, and χ(j∈A(l0)) o ep esen a he se
o loca ions adjacen o l0, and a p e iously known loca ion χ(j=l1), age aand popula ion size ηj
(Kennan and Walke , 2011).
∆τ(x, j) = (γ0τ+γ1D(ℓ0, j)−γ2χ(j∈A(ℓ0)) −γ3χ(j=ℓ1) + γ4a−γ5ηj)χ(j=ℓ0).(2.6)
Indi iduals maximise he expec ed p esen alue o li e ime u ili y by mo ing om he cu en loca ion,
wi h mo ing cos s, and accumula ing u ili y in he nex loca ion, depending on he shocks o which hey
a e exposed and he knowledge hey ha e abou oppo uni ies elsewhe e (Kennan and Walke , 2011).
Beyond indi idual choice models, Tiebou (1956) in oduces a amewo k assuming no mo ing cos s
and comple e in o ma ion, esul ing in a ee mo emen o consume s owa d he communi y ha bes
sa is ies hei p e e ences. Building on he concep o mig a ion, Ha is and Toda o (1970) p opose a
wo-sec o model o u al-u ban mig a ion, whe e he u ban minimum wage exceeds u al ea nings, and
mig a ion lows ake place. This p ocess will e en ually lead o equilib ium, as mig a ion con inues un il
bo h wages a e equal (Jia e al., 2023).
Expanding he discussion o spa ial equilib ium Roback (1982) p esen s a model wi h homogeneous
and pe ec ly mobile wo ke s whe e indi ec u ili y depends on nominal wages, housing cos s and local
ameni ies. The model assumes a ixed land supply, due o limi ed housing elas ici y and implies ha any
shock o he local economy is ully capi alized in land p ices, lea ing he u ili y o he wo ke una ec ed.
Fo ins ance, a posi i e p oduc i i y shock aises nominal wages and demand o housing, wo ke s will
consume less housing due o highe p ices, which hen acili a es in-mig a ion. Mo eo e , a eas wi h
g ea e ameni ies a ac mo e mig an s, which lowe s wages and aises p ices o local goods, se ices and
land (Jia e al., 2023). To accoun o dynamic mig a ion pa e ns, Coen-Pi ani (2010) de elops a gene al
equilib ium model o g oss and ne mig a ion ac oss loca ions, conside ing he unobse ed he e ogenei y
o indi iduals in mig a ion decisions. G oss mig a ion lows a e d i en by idiosync a ic ma ch shocks,
be ween wo ke s and loca ions, and ne mig a ion lows due o pe sis en p oduc i i y shocks. Wo ke s a e
d awn o loca ions expe iencing posi i e p oduc i i y shocks and disco e hei idiosync a ic ma ch upon
mig a ion (Jia e al., 2023).
Based on he wo k o Roback (1982); Beeson and Ebe s (1989); Rappapo (2004); Faggian e al.
(2012), Rod íguez-Pose and Ke e e (2012) p esen a simple loca ional choice spa ial equilib ium model o
analyse he a ac i eness o di e en e i o ies. In which ne mig a ion is modelled as being de e mined
by i ms’ and households’ eac ions o di e ences in p oduc i i y and u ili y a ibu es ac oss he e i o y
5
(Rod íguez-Pose and Ke e e , 2012). Fi ms and households a e assumed o be mobile and hei loca ion
p e e ences depend on p o i and u ili y maximiza ion ac oss di e en places. Shaping he beha iou o
i ms, he ne p esen e u ns be ween any egion jand ia e:
1
(1 + d) ∫∞
Πj
≥1
(1 + d) ∫∞
Πi
.(3)
Companies a e expec ed o maximize cu en and expec ed p o i s (π) ac oss di e en loca ions discoun ed
by d. P o i s depend on wages, en al cos s o land and exogenous na u al o socioeconomic ea u es o
each place. Fi ms a e loca ed in a eas wi h highe p o i s (j) un il he long un, whe e cu en and expec ed
p o i s a e equal ac oss all possible loca ions. The loca ion decision made by companies will shape he
economic cha ac e is ics and a ibu es ac oss he e i o y (Rod íguez-Pose and Ke e e , 2012).
On he o he hand, he place-speci ic u ili y de i ed by each indi idual will depend on he consump ion
o goods, non- aded housing se ices and non-economic place-based na u al o (man-made) cul u al
ameni ies, gi ing ise o ne p esen u ili y (Rod íguez-Pose and Ke e e , 2012):
Vi=1
(1 + d) ∫∞
Vi
(Gi
, Di
, Zi
),(4)
Gi
,Di
and Zi
ep esen he consump ion o goods, housing and ameni ies espec i ely. A li e ime
budge cons ain (Equa ion 5) dic a es he mo e decision aking in o accoun en al and housing p ices
pi
, a e age wages wi
and he p obabili y o becoming employed in any gi en place ei
(Rod íguez-Pose
and Ke e e , 2012).
1
(1 + d) ∫∞
(Gi
+pi
Di
)≤1
(1 + d) ∫∞
wiei
.(5)
Wi h he maximisa ion o Equa ion (5) unde he budge cons ain , he ollowing indi ec u ili y unc ion
is achie ed, aming egional ne mig a ion as he s uc u al ou come o a se o ac o s (Rod íguez-Pose
and Ke e e , 2012):
Un(pn, Zn, wn, en, Sn, Nn), n :i, j. (6)
The indi ec u ili y is posi i ely ela ed o na u al and sociocul u al o gene al ameni ies Zn, household
income wn, he p obabili y o inding a job en, and al hough no conside ed in he empi ical pa o his
wo k, he e i o y embedded socioeconomic egional ea u es Sn, p esence o mig an communi ies Nn
and housing cos s pn(Rod íguez-Pose and Ke e e , 2012).
The mig a ion decision will be igge ed by he indi ec u ili y di e ence be ween egion iand egion
j(∆Uji =Uj−Ui), and he possible psychological and pecunia y u ili y cos s o mo ing Cij. The
indi idual mo es om i o ji he u ili y di e en ial be ween he wo places minus he cos s o mo ing
6
is highe han ze o (∆Uij −Cij >0), meaning ha he bene i s o mo ing o jou weigh he cos s
(Rod íguez-Pose and Ke e e , 2012). Hence, acco ding o (Fe guson e al., 2007,p.82) people ” o e wi h
hei ee ”, one can assess he a ac i eness o a egion by analysing he in and ou - lows o economic
agen s (Rod íguez-Pose and Ke e e , 2012). The popula ion s ock in egion ia ime 0is exp essed as:
Pi
0=Pi
1+Mij
1−Mji
1+di
1−bi
1(7)
in which Pi
1s ands o indi iduals who did no mo e be ween 0and 1,Mij
1 he mig an s mo ing
away om egion i o any egion j,Mji
1mig an s coming om any egion j o egion i, las ly di
1and bi
1
which a e dea hs and bi hs espec i ely Rod íguez-Pose and Ke e e (2012). The popula ion change in
egion io e he pe iod 0and 1is (Rod íguez-Pose and Ke e e , 2012):
Pi
1−Pi
0=Mji
1+bi
1−Mij
1−di
1(8)
Rea anging and s anda dising equa ion 8 by he popula ion s ock a 0, an exp ession o he ne
mig a ion a e o he egion iis achie ed, which indi ec ly depends on he u ili y di e en ial ac oss di e en
places (Rod íguez-Pose and Ke e e , 2012).
Migi
1=Mij
1−Mij
0
Pi
0
=(Pi
1−Pi
0−bi
1+di
1)
Pi
0
.(9)
2.2 Tiebou Hypo hesis
The main p oblem in de e mining he op imal supply o a public good is he mechanism by which
consume o e s egis e hei p e e ences. F om he go e nmen ’s pe spec i e, i mus ind he popu-
la ion’s p e e ences and ax hem acco dingly. I his happens, public e enues and expendi u es e lec
consume - o e p e e ences, bu consume s can unde s a e hei p e e ences and ee- ide (a oid ax).
Hence no local mechanism is pu in place, o ensu e he expendi u e on public goods is a a p ope
le el. I a esiden is abou o mo e o ano he ju isdic ion, wha a iables will he conside ele an o
conduc his mo e? I depends on his p e e ences, i he has child en, ce ainly he is mo ing o a municipali y
wi h a conside able le el o expendi u e on schools. Howe e , i he is e i ed, ha would no be impo an
as he would p e e expendi u e on nu sing homes and heal h se ices. The e o e, he supply and quali y
o in as uc u e and se ices, pa ks, police s a ions, i e igh e s a ions, oads, and pa king lo s, will en e
an indi idual’s decision (Tiebou , 1956).
Following he a gumen on local expendi u es, Tiebou (1956) de elops a Local Go e nmen Model,
yielding a solu ion o he le el o expendi u es o public goods based on he ollowing assump ions: (1)
7
consume o e s a e ully mobile and will mo e o ha communi y whe e hei p e e ence pa e ns, which
a e se , a e bes sa is ied; (2) consume o e s a e assumed o ha e ull knowledge o di e ences among
e enue and expendi u e pa e ns and o eac o hese di e ences; (3) he e is a la ge numbe o commu-
ni ies in which he consume - o e s may choose o li e; (4) es ic ions due o employmen oppo uni ies
a e no conside ed; (5) he public se ices supplied exhibi no ex e nal economies o diseconomies be-
ween communi ies; (6) o e e y pa e n o communi y se ices se by a ci y manage , who ollows he
p e e ences o olde esiden s o he communi y, he e is an op imal communi y size ( he numbe o esi-
den s o which he bundle o se ices can be p oduced a he lowes a e age cos ); (7) communi ies below
he op imum size seek o a ac new esiden s o lowe a e age cos s, hose abo e do he opposi e, and
hose a he op imum y o keep hei popula ion cons an .
Gi en he ull mobili y assump ion and he emaining, lows ake place be ween communi ies ha a e
no a he op imal communi y size. Each ci y manage has a demand o nlocal public goods, m−1
o he ci y manage s go in o a na ional ma ke and bid o adequa e uni s o public se ice o each kind.
The demand o each public good nwill be he sum o he demand o all communi ies m. This demand
will app oxima e he demand ha ep esen s he ue p e e ences o consume o e s (as i hey e ealed
hei ue p e e ences) (Tiebou , 1956).
Howe e , he model is conside ed o all sho o he op imum, because i a gi en communi y is a he
op imum popula ion le el, and some consume - o e conside s i he bes p e e ence i , he/she canno
mo e he e and mus look o a pe ec subs i u e. I ha subs i u e isn’ a ailable, he op imal p e e ence
posi ion is no eached, and ul ima ely he solu ion will app oxima e he op imum. Two addi ional poin s a e
highligh ed; i s ly, changes in he cos s o one public se ice will cause changes in he quan i y p oduced
and secondly, he cos s o mo ing be ween communi ies should be ecognised. (Tiebou , 1956).
While some assump ions may no be ealis ic, Tiebou s a ed “The consume - o e may be iewed
as picking he communi y which bes sa is ies his p e e ence pa e n o public goods” (Tiebou , 1956, p.
418). Hence, Local go e nmen s being esponsible o supplying public goods and se ices, and collec ing
he espec i e axes, may be able o a ec he consume - o e communi y choice (mig a ion lows).
2.3 Empi ical S udies
Beyond he heo e ical sphe e, ex ensi e empi ical li e a u e add esses mig a ion, Table 1 p esen s a
summa y o empi ical indings on mig a ion lows and communi y selec ion, ha make use o agg ega e
da a analyses. While Table 2, household-le el analyses. In gene al hese s udies conside he ole o
socioeconomic, local go e nmen and ameni y a iables.
8
Commonly used a iables o ep esen job ma ke oppo uni ies include unemploymen , employmen
a es, and dis ibu ion o employmen ac oss sec o s. Economic oppo uni ies, G oss Domes ic P oduc
(GDP) pe capi a, a e age wages, and he sha es o highly educa ed popula ion/wo ke s, a skilled labou
o ce, can help o a ac businesses and companies o a gi en communi y, making i mo e a ac i e o
po en ial mig an s. Highly skilled wo ke s can also con ibu e posi i ely o a communi y h ough knowledge
spillo e s, which can inc ease he gene al p oduc i i y o a place Rod íguez-Pose and Ke e e (2012).
Ameni ies also play a signi ican ole in shaping he a ac i eness o places, con ibu ing o hei o e -
all con enience, com o , and enjoymen . Na u al ameni ies such as maximum, minimum, and a e age
empe a u es, p ecipi a ion, cloudiness, coas al communi ies, and na u al landscapes a e equen ly high-
ligh ed ((G a es, 1976, 1980; Rod íguez-Pose and Ke e e , 2012; Ke e e and Rod íguez-Pose, 2015)).
Simila ly, man-made ameni ies such as hea es, museums, housing and access o anspo a ion (Sasse ,
2010; Rod íguez-Pose and Ke e e , 2012; Dahlbe g e al., 2012; Buch e al., 2014). Con e sely, ac o s
such as c ime, a ic, low en i onmen al quali y, pollu ion, and high popula ion densi y end o dec ease
a egion’s desi abili y (Buch e al., 2014; Banzha and Walsh, 2008; Ge mani e al., 2021).
Local go e nmen s can also in luence mig a ion lows h ough public goods, se ices, and local axes,
as explo ed h ough he lens o communi y choice and mig a ion. Mos s udies ha e employed disc e e
choice models using household da a (F iedman, 1981; Quigley, 1985; Wes e lund and Wyzan, 1995;
Bayoh e al., 2006; Dahlbe g e al., 2012). Howe e , esul s ha e been mixed: while F iedman (1981)
and Bayoh e al. (2006) ound ha public se ices a ac new esiden s (albei wi h small e ec s in he
o me and la ge in he la e ), Quigley (1985) epo ed a nega i e impac . These di e ences may s em
om di e ences in household cha ac e is ics and es ima ion app oaches (Dahlbe g e al., 2012). O he
s udies ha e used agg ega e da a, p ima ily inding a link be ween local go e nmen se ices, expendi u e,
and ne mig a ion (Cebula, 2024; Cebula and Cla k, 2013; Cebula and Nai -Reiche , 2012; B ueckne and
Š ’as ná, 2020; Yu e al., 2019; Day, 1992).
9
Table 1: Empi ical S udies on Mig a ion (agg ega e da a)
Re e ence Dependen Va iable Independen Va iables (Sign) Me hodology Sample
Cebula (2024) g oss in-mig a ion a e (-)unemploymen ,(-)cos o li ing,(-
)popula ion densi y,(+)median amily
income,(+)a e age Janua y empe a-
u e,(+) ax eedom indices.
Panel 2SLS S a e le el USA [2010-
2017]
Ge mani e al.
(2021)
ne mig a ion a e (-)unemploymen ,(+)income,(+)educa ion,(-
)ai pollu ion,(+) alue o eal
es a e p ope ies,(+)numbe o
i ms,(+)in as uc u es.
OLS and 2SLS I aly p o incial-le el da a
[2011-2015]
B ueckne and
Š ’as ná (2020)
log di e ence be ween
sha es o popula ion mi-
g a ing and no mig a ing
(+)p io in e egional commu ing,(-)job
seeke s pe job acancy/college g adu-
a es pe job acancy,(+)high educa ed
popula ion,(+)Go Spending on ans-
po a ion,cul u e and spo s,(-)Go
Spending on indus y and housing
suppo ,(-)popula ion densi y.
2SLS Regional le el Czech Re-
public [2011-2015]
Con inued on he nex page
10
(Table 1 – Con inued.)
Re e ence Dependen Va iable Independen Va iables (Sign) Me hodology Sample
Yu e al. (2019) ne mig a ion a e (+)GDPpc,(-
)unemploymen ,(+)educa ion,(+)buses,(+) oads,(-
) empe a u e,(-)humidi y.
Boo s ap linea e-
g ession
Chinese ci y-le el da a
[2010]
Ba ei a e al.
(2017)
% popula ion change be-
ween censuses
(-)unemploymen ,(+)employmen
sha e(seconda y and e ia y sec-
o ),(+)a e age maximum em-
pe a u es,(+)highe p opo ion o
middle-aged acan houses.
Random E ec s Po uguese ci y-le el
[1991-2011]
Ke e e and
Rod íguez-Pose
(2015)
ne mig a ion a e (-)unemploymen ,(-)ag icul u al
sha e,(+)quali y o go e nmen .
Fixed e ec s and
GMM
EU NUTS-2 egions [1995-
2009]
Buch e al. (2014) ne mig a ion a e (o wo k-
e s)
(+)employmen g ow h, (+) ou is
s ays,(-)c ime a e,(+) ec ea ion
a eas,(+)a e age la size.
Pooled OLS and
Fixed E ec s
Ge man ci ies [2000-
2007]
Con inued on he nex page
11
(Table 1 – Con inued.)
Re e ence Dependen Va iable Independen Va iables (Sign) Me hodology Sample
Cebula and Cla k
(2013)
ne mig a ion a e (+)employmen g ow h,(+)median
amily income,(-)cos o li ing,(+)mean
janua y empe a u e,(-)popula ion
densi y,(-)s a e pe sonal income ax,(-
)p ope y ax,(+) pe pupil educa ion
expendi u e,(+)medicaid expendi u e
pe ecipien .
2SLS S a e le el USA [2000 and
2008]
Cebula and Nai -
Reiche (2012)
ne mig a ion (-)unemploymen ,(-)cos o
li ing,(+)median amily in-
come,(+)employmen g ow h,(-)s a e
income and local p ope y ax,(+)pe
pupil educa ion expendi u e.
OLS and 2SLS S a e le el USA [july2000-
july2008]
Rod íguez-Pose and
Ke e e (2012)
ne mig a ion a e (+)GDPpc,(-)unemploymen ,(-
)sha e o young,(+)social il-
e index1,(+) ec ea ion and
ou ism,(+)Janua y empe a u es.
Fixed e ec s, IV and
GMM
EU Regions [1990-2006]
Con inued on he nex page
1accoun s o e i o y inno a ion enhancing ea u es, buil using egional educa ional a ainmen s and he composi ion o p oduc i e esou ces
12
Figu e 1: Popula ion Densi y and Pe cen age o Popula ion Abo e 75 Yea s
(a) Popula ion Densi y (b) Pe cen age o popula ion abo e 75 yea s
Da a sou ce
: Na ional Ins i u e o S a is ics (INE)
19
Beyond he phenomenon o popula ion ageing, he decline in economic ac i i y is also becoming
inc easingly p e alen , e idenced by a educ ion in employmen oppo uni ies and business p esence,
diminished in es men le els, a s agna ion in inno a ion, ageing in as uc u e, sho age o human capi al,
and low p oduc i i y. These ac o s e lec a b oade inabili y o hese egions o gene a e alue added
(Figu e 2) and o emain compe i i e bo h na ionally and globally (Unidade de Missão pa a a Valo ização
do In e io , República Po uguesa, 2017).
Figu e 2: G oss Value Added (millions o eu os) 2023
Da a sou ce
: INE
All hese asymme ies led o subs an ial a ia ions in he dis ibu ion o popula ion. Figu e 3a is p oo
ha ci izens ha e been mo ing owa ds u banised a eas, mos ly ac oss he coas line. In ela i e e ms
he municipali ies o Ma a, Mon ijo, Moi a and Albu ei a ha e had a signi ican popula ion g ow h. While
A uda dos Vinhos, Bena en e, Palmela, Sesimb a, Cascais, Lagos, Po imão and Loulé exhibi mo e
mode a e popula ion g ow h, cha ac e ized by lowe g ow h a es.
On he o he hand, u al egions ei he close o he coas line o in he hin e land, ha e been expe-
20
iencing sha p and signi ican popula ion dec eases, some excep ions include he in e io dis ic capi al
ci ies, which expe ienced sligh g ow h, e lec ed in small posi i e g ow h a es.
Figu e 3: Popula ion and employmen a ia ion a he municipal le el
(a) Municipal popula ion a ia ion 2001-2021 (b) Municipal employmen a ia ion 2001-2021
Da a sou ce
: INE
F om 2001 o 2021 (Figu e 3b), he a ia ion in municipal employmen aligns wi h wha was expec ed.
U ban municipali ies loca ed along he coas line exhibi ed a g ea e pe cen age change in employmen .
The mos p onounced posi i e g ow h a es we e obse ed in he municipali ies o To es Ved as, Ma a,
A uda dos inhos, Sob al de Mon e Ag aço, Sesimb a, Alcoche e bena en e, Mon ijo, Palmela, Odemi a
and Aljezu .
An analysis o employmen a ia ion ac oss economic ac i i y sec o s be ween 2001 and 2021 e eals
a signi ican shi in job oppo uni ies, mo ing away om he p ima y and seconda y sec o s owa d a
p edominance in he e ia y sec o (Figu e4 and A.1). P ima y sec o employmen g ew signi ican ly
in ela i e e ms in he municipali y o Odemi a, wi h mo e mode a e inc eases obse ed in Lousã and
21
Sa doal. In con as , he as majo i y o he emaining municipali ies expe ienced a decline in p ima y
sec o employmen . While employmen g ow h in he seconda y sec o was nega i e in he majo i y o
municipali ies. Te ia y sec o employmen g ow h was posi i e ac oss mos o he e i o y. Howe e ,
se e al municipali ies in Al o and Baixo Alen ejo egis e ed declines in his sec o . Unsu p isingly, hese
sub- egions also expe ienced popula ion dec eases, as illus a ed in igu e 3a.
Figu e 4: Seconda y and e ia y sec o employmen a ia ion a he municipal le el
(a) Municipal seconda y sec o employmen a ia ion
2001-2021
(b) Municipal e ia y sec o employmen a ia ion 2001-
2021
Da a sou ce
: INE
O e all, economic ac i i y expe ienced signi ican g ow h and expansion in he coas al and su ound-
ing municipali ies o he dis ic s o B aga, Po o, Lisbon, Se úbal and Fa o ( igu es 2,3b and 4). This
de elopmen con ibu ed o he inc eased a ac i eness o hese egions, leading o a concen a ion o
popula ion, human capi al, and highe wages.
22
Figu e 5: Pe cen age o popula ion om ano he municipali y.
Da a sou ce
: Sales Index
Rega ding mig a ion lows, he mo emen o popula ion be ween municipali ies is illus a ed in 5.
In 2001, jus o e wo pe cen o he popula ion mig a ed be ween municipali ies, wi h his pe cen age
showing a sligh inc ease by 2011. Fu he mo e, in he mos ecen census, he egis e ed pe cen age o
ci izens om ano he municipali y eached nea ly se en pe cen . One can conclude ha in e -municipal
eloca ion inc eased o e he pe iod om 2001 o 2021; howe e , his dynamic was no uni o m, as se e al
municipali ies did no egis e ne posi i e mig a ion lows. Those belonging o he dis ic s o Lei ia, Lisbon,
Se úbal and Fa o we e, in gene al, mo e a ac i e exhibi ing posi i e a e age ne mig a ion. Simila ly,
municipali ies su ounding Po o—such as Vila do Conde, Ma osinhos, Maia, and Vila No a de Gaia—as
well as A ei o, Oli ei a do Bai o, and he dis ic capi als municipali ies B aga, Viseu, and B agança also
eco ded posi i e a e age ne mig a ion.
23
Figu e 6: A e age ne mig a ion [2001-2021]
Da a sou ce
: INE
3.3 Local go e nmen policy ac ion o a ac popula ion
Municipali ies acing popula ion decline and economic s agna ion ha e no emained passi e. In e-
sponse o hese challenges, many ha e adop ed measu es aimed a a ac ing bo h new esiden s and
businesses o hei e i o ies.
One o he simples ins umen s a hei disposal is he se ing o local ax a es. Adjus men s o he
Pe sonal Income Tax and Local P ope y Tax a es can se e as incen i es o indi iduals.
In 2024, acco ding o Associação Po uguesa de Famílias Nume osas (2025) 274 municipali ies
adop ed a special Local P ope y Tax egime a ge ing amilies. This measu e allows o a educ ion in
he ax amoun based on he numbe o dependen s: 30 eu os o one dependen , 70 eu os o wo, and
140 eu os o h ee.1
1h ps://www.ap n.com.p /IMI2025.php
24
Fu he incen i es a e speci ically di ec ed a younge popula ions. Fo ins ance, in A cos de Valde ez,
young indi iduals pu chasing a p ope y in ended solely as hei pe manen esidence a e g an ed exemp-
ions om bo h he Local P ope y Tax and he P ope y T ans e Tax. The Local P ope y Tax exemp ion
exemp ion is alid o an ini ial pe iod o h ee yea s and may be enewed o an addi ional wo yea s. 2
Some municipali ies p o ide bi h and adop ion allowances, o en condi ional on he unds being spen
wi hin he local economy. No able examples include Cha es, Alcobaça, Mon emo -o-Velho and São João da
Pesquei a , which ha e implemen ed hese incen i es as pa o b oade s a egies o p omo e demog aphic
sus ainabili y.3
In he ield o educa ion, municipali ies a e o e ing a ange o suppo s: annual school ouche s
edeemable in he local economy, ee o subsidized school anspo and schola ships o s uden s in
public highe educa ion, as well as me i -based awa ds o op-pe o ming 12 h g ade s uden s. 4
In addi ion o a ac ing new esiden s, os e ing local economic de elopmen h ough business ac i i y
and in es men has become a s a egic p io i y. Howe e , he s uc u al cha ac e is ics o many in e io
Po uguese egions may pose signi ican challenges o p i a e sec o in es men .
To add ess hese challenges, municipali ies ha e implemen ed a ange o incen i es aimed a a -
ac ing business in es men . These include educ ions o exemp ions in he local co po a e income ax
su cha ge, o en de e mined by ac o s such as business olume, economic ac i i y sec o , company size
and jobs. As well as local p ope y ax minimum a es, educ ion o exemp ion. Addi ional suppo mea-
su es include he p o ision o in as uc u es and indus ial lo s, mic oc edi p og ams o en ep eneu s,
and he simpli ica ion o bu eauc a ic p ocesses. 5
3.3.1 Municipali y o São João da Pesquei a
São João da Pesquei a is loca ed in he in e io o Po ugal, in he no he n pa o he Viseu dis ic ,
wi hin he Dou o Dema ca ed Region. Like many o he in e io municipali ies, i has aced a consis en
popula ion decline o e he pas wo decades.
The selec ion o São João da Pesquei a is d i en no only by pe sonal a ilia ions bu also by i s his-
o ical and cul u al signi icance. Recognized as he oldes municipali y in Po ugal, i is si ua ed wi hin
2h ps://www.cma .p /pages/2604
3h ps://www.cha es.p /pages/966 h ps://po aldomunicipe.cm-alcobaca.p /50697/incen i o-a-na alidade
h ps://www.sjpesquei a.p /p/apoioana alidadeeadocao h ps://www.cm-mon emo elho.p /index.php/
incen i o-a-na alidade
4h ps://www.sjpesquei a.p /se icos/educacao h ps://www.cm-ca azedadeansiaes.p /se icos/educacao/
bolsas-de-es udo h ps://cm- ei a.p /-/ano-le i o-2024-2025- ale-o e a-de-ma e ial-escola
5h ps://www.sjpesquei a.p /no icia-17/in o macao-apoios-incen i os h ps://www.cm-nelas.p /in es i /apoios/
incen i os-do-municipio/ h ps://cm-p oencano a.p /1030/incen i os-ao-in es imen o
25
he cul u ally ich Dou o wine egion, which is p esen ly expe iencing a pe iod o no able socioeconomic
ad e si y. Simila o o he in e io municipali ies, i is unde going sus ained demog aphic and economic
decline, d i en in pa by i s geog aphic isola ion om majo economic hubs and exace ba ed by lim-
i ed accessibili y, due o unde de eloped oad in as uc u e and challenging opog aphy. Ne e heless,
ou ism has been expe iencing g ow h, as in o he egions o Po ugal. While i may o e an oppo uni y
o coun e ac ou -mig a ion by c ea ing employmen , i emains unce ain whe he i can ensu e long- e m
demog aphic s abili y.
São João da Pesquei a eco de nega i e ne mig a ion a es om 1991 o 2019. Howe e , om 2019
onwa ds, his end e e sed, wi h he municipali y egis e ing posi i e, albei modes , ne mig a ion a es
(Figu e 7). Despi e his shi , he o e all popula ion end emained nega i e: he popula ion declined
om 9581 in 1991 o 6772 in 2023. This decline is p ima ily d i en by pe sis en nega i e demog aphic
change, wi h dea hs consis en ly ou numbe ing bi hs, and by he long- e m e ec s o ou wa d mig a ion.
A b eakdown o he popula ion by age g oups p o ides a mo e nuanced unde s anding o demog aphic
dynamics. Be ween 1991 and 2023 he numbe o esiden s aged 65 and o e inc eased s eadily, while
younge age g oups, 14 yea s old and unde expe ienced a sha p decline, e lec ing a sus ained d op
in bi h a es. The wo king-age popula ion (25-64) emained ela i ely s able a a ound 4000 un il 2011.
Howe e , om 2012 onwa ds, a downwa d end eme ged, likely associa ed wi h he e ec s o he so e eign
deb c isis, s abilizing a app oxima ely 3500 by 2019.
The municipali y expe ienced a signi ican dec ease in i s younges age g oups, d i en by ou mig a ion
and pe sis en ly low bi h a es. Meanwhile, hose who emained ha e con ibu ed o he g ow h o he
olde popula ion segmen . In 1991, he wo younges age g oups accoun ed o 40% o he o al popula ion;
by 2023 hei sha e had allen o 20%. Con e sely, he p opo ion o he oldes age g oup inc eased om
16% in 1991 o 29% in 2023. This demog aphic shi pu s a isk he municipali y’s capaci y o eplenish
i s popula ion, u he exace ba ing he o e all decline.
Economically, he municipali y has adi ionally elied on pp ima y sec o ac i i ies, pa icula ly wine
and oli e oil p oduc ion. Howe e , employmen in his sec o has declined, e lec ing he impac o mecha-
niza ion. A he same ime, employmen in he e ia y sec o has g own modes ly, likely due o he g ow h
o ou ism and ag icul u al suppo indus ies, his g ow h has no been enough o compensa e he job
losses in he p ima y sec o since 2001. Employmen in he seconda y sec o has also expe ienced a
sligh decline o e he same pe iod.
O e he las h ee decades, ag icul u al ac i i ies ha e aced inc easing compe i ion a bo h he global
and Eu opean Union le els. Small amily-owned businesses s uggled o emain compe i i e and ul ima ely
26
Figu e 7: Ne mig a ion (São João da Pesquei a)
Da a sou ce
: INE
exi ed he ma ke , con ibu ing o he employmen decline in he p ima y sec o , as shown in Figu e 9.
This may ha e also been he case o o he municipali ies hea ily elian on ag icul u e, pa icula ly in he
con ex o globaliza ion and ma ke libe aliza ion.
On Ma ch 21s , a semi-s uc u ed in e iew was conduc ed ia email wi h he cu en mayo o São
João da Pesquei a, Manuel Na á io Co dei o. The in e iew was ocused on he municipali y’s s a egies
o s imula e economic ac i i y and a ac new esiden s.
1. Has he ans e o new powe s o he municipali y unde Law 50/2018 been a ou able? Has i
p o ided he municipali y wi h new ools o a ac popula ion?
The mayo esponded ha Law 50/2018 has con ibu ed o a g ea e p oximi y and in e es in local
de elopmen . He emphasized ha , in he a ea o Educa ion, al hough he municipali y spends mo e
han i ecei es om he cen al go e nmen , his commi men o educa ion will e en ually pay o .
The a eas o Heal h and Social Ac ion ha e also bene i ed, wi h municipali ies be e posi ioned o
imp o e and expand hei se ices
2. Gi en he challenges posed by popula ion decline in he in e io o Po ugal, wha ini ia i es has
he municipali y p omo ed o e ain young people and a ac amilies? Ha e hese ini ia i es been
success ul?
The mayo emphasized ha he municipali y is commi ed o c ea ing condi ions ha ensu e he
27
Figu e 8: Popula ion by age g oups (São João da Pesquei a)
Da a sou ce
: INE
Figu e 9: Employmen by sec o (São João da Pesquei a)
Da a sou ce
: INE
28
5 Empi ical F amewo k
5.1 Es ima ion S a egy
The es ima ion s a egy consis s o a panel da a econome ic analysis. A panel da a se is cha ac e ised
by epea ed obse a ions o he same uni s (Po uguese mainland municipali ies) ac oss ime. Se e al
ad an ages can be exploi ed when using panel da a, one is a oiding/o e coming he bias caused by
unobse ed he e ogenei y.
Yi =β0+
k
∑
j=1
βjXji +ϵi (10)
This equa ion ep esen s a panel da a econome ic model in which explana o y a iables a e con ained
in he ec o Xji o municipali y i, yea , and j o each a iable. The coe icien βmeasu es he e ec
o each a iable on he dependen a iable (Y), and he dis u bance e m εi . Howe e , i Xji a iables
a e no success ul enough in explaining Y he e may be unobse ed e ec s, usually added o he model
as αi. To ackle unobse ed e ec s, wo me hods can be used, Fixed E ec s o Random E ec s each
me hod handles he unobse ed e ec di e en ly.
The ixed e ec s model allows o a co ela ion be ween αiand independen a iables o exis , i can
be applied using se e al me hods. One o which is he Leas Squa es Dummy a iable (LSDV) me hod.
This assumes ha he unobse ed e ec αiis a pa ame e o be es ima ed o each i, inco po a ing each
indi idual unobse ed e ec in o he model, by including a dummy a iable o each i, o a oid he dummy
a iable ap he cons an is d opped. O he me hods, such as he Fi s Di e ences o Wi hin G oups a e
also used, he la e being he chosen ixed e ec s me hod by s a a.
On he o he hand, he andom e ec s model ea s he unobse ed e ec αias being a andom
a iable, elying i s ly on he condi ion ha unobse ed a iables a e d awn om a gi en dis ibu ion.
Allowing αi o be included in a compound dis u bance e m ui =αi+εi . And he second condi ion is
ha αimus be unco ela ed wi h obse ed a iables Xji .
To choose be ween andom e ec s and ixed e ec s he Hausman es is used. I he null hypo hesis
35
is ejec ed he key assump ion o he andom e ec s is iola ed (αimus be unco ela ed wi h obse ed
a iables Xji ) and ixed e ec s is he app op ia e speci ica ion. I we ail o ejec he null hypo hesis,
andom and ixed e ec s a e alid, bu ixed e ec s will be ine icien .
5.2 Baseline model
The baseline empi ical model o ne mig a ion is p esen ed in he ollowing equa ion:
nm i =αsocioeconomici −1+βlocalgo e nmen i −1+γameni yi −1+µi+ν +εi (11)
i= 1, . . . , 278; = 2006, . . . , 20231
whe e
nm
i is he ne mig a ion a e o municipali y i in yea . Independen a iables a e dis ibu ed
among h ee ec o s o no a ion pu poses and lagged one pe iod due o endogenei y issues (Rod íguez-
Pose and Ke e e , 2012). Being he
socioeconomic
and
local go e nmen
ec o s o mos in e es , and
ameni y
as con ols. The i s ec o including socioeconomic a iables (economici, −1), is composed o
i e independen a iables, o accoun o he socioeconomic condi ions o each municipali y:
1.
a gsala y
: A e age sala y in each municipali y, a 2022 p ices;
2.
UIbene
: Unemploymen insu ance bene icia ies o cap u e he local labou ma ke impac ;
3.
SIIbene
: The bene icia ies o social in eg a ion income, o measu e he po e y le el o municipal-
i ies;
4.
HEwo ke s
: Pe cen age o wo ke s wi h highe educa ion, as hese may con ibu e posi i ely o he
communi y;
5.
m housing
: Median alue o housing a 2022 p ices.
The second ec o (localgo e nmen i, −1) includes expendi u e, deb and local axes, ha a e wi hin
he each o he municipali y’s execu i e:
1.
LPT
: Local p ope y ax;
2.
pPIT
: Local pe sonal income ax pa icipa ion;
3.
To alExp
: Logged pe capi a o al expendi u e a 2022 p ices;
1The pe iod co e ed changes ac oss speci ica ions.
36
4.
Deb Mun
: Logged pe capi a deb , a 2022 p ices;
5.
En Exp
: Logged pe capi a expendi u e in en i onmen p o ec ion, a 2022 p ices;
6.
Cul Exp
: Logged pe capi a expendi u e in cul u e, a 2022 p ices.
The hi d ec o (ameni yi, −1), measu es he appeal o municipali ies om a non-pecunia y pe spec-
i e, ameni ies which con ibu e o con enience and quali y o li e.
1.
ho elgues s
: Places wi h mo e ou ism ac i i y may be mo e pleasan and appealing, while on he
con a y hey can con ibu e o dec easing housing supply, his a iable measu es he numbe o
ho el gues s in he pe cen age o he o al popula ion;
2.
c im
: Places wi h a highe le el o c ime ac i i y may be less a ac i e.
Finally, µiand ν accoun o municipal ixed e ec s and ime ixed e ec s, and ϵi he e o e m.
The a e age sala y
a gsala y
, local p ope y ax
LPT
, expendi u e on en i onmen p o ec ion
En Exp
and cul u e
Cul Exp
, c ime a e
c im
and median alue o housing
m housing
u ned ou o ha e high VIF
alues, indica ing he p esence o mul icollinea i y. To add ess i , he decision was o d op hese a iables,
and he logged a e age sala y was eplaced by annual a e age sala y g ow h. The ini ial baseline model is
es ima ed lagging independen a iables by one yea , addi ionally al e na i e models a e es ima ed lagging
independen a iables by wo and h ee yea s. To cap u e longe e m e ec s, addi ional models a e
es ima ed wi h a iables compu ed in i e, ou and h ee yea pe iod a e ages.
Be o e p oceeding o discuss empi ical esul s, a analysis ega ding he Hausman es was pe o med,
bo h he baseline and pe iod models p esen ed a p- alue lowe han 0.05, leading o he ejec ion o he
null hypo hesis and indica ing ha ixed e ec s a e he app op ia e speci ica ion.
37
6 Empi ical Resul s
6.1 Baseline model
The esul s o he baseline model a e p esen in Table 6. As expec ed, wage g ow h exhibi s a posi-
i e coe icien bu ne e achie ing s a is ical signi icance. Local labou ma ke condi ions, specially he
pe cen age o unemploymen insu ance bene icia ies, has a nega i e and signi ican impac on he de-
penden a iable in mos model speci ica ions, in he ou h column a one pe cen age poin inc ease in
unemploymen insu ance bene icia ies is associa ed wi h a 0.0408 pe cen age poin dec ease o he ne
mig a ion a e. The pe cen age o employed indi iduals wi h high educa ion o he las h ee columns has
he expec ed posi i e sign and a nega i e sign o he i s column, ne e eaching s a is ical signi icance.
Simila ly, he pe cen age o bene icia ies o social in eg a ion income gene ally displays he expec ed neg-
a i e sign ac oss mos speci ica ions bu ails o a ain s a is ical signi icance. The pe cen age o ho el
gues s exhibi s mixed esul s, wi h no s a is ical signi icance. Rega ding local go e nmen a iables, nei-
he he pe sonal income ax no deb , bo h o which exhibi posi i e coe icien s, demons a e a signi ican
e ec on ne mig a ion. Likewise, o al expendi u e pe capi a which has a nega i e coe icien , does no
achie e s a is ical signi icance.
The a ac i eness o a municipali y may no be solely in luenced by he p io yea condi ions, bu
hose om wo o h ee yea s ago. To accoun o his, addi ional models we e es ima ed using wo-yea
lagged and h ee-yea lagged independen a iables in he Tables 7 and 8.
The nega i e and signi ican e ec o labou ma ke condi ions pe sis s (
UIbene
) o he majo i y o
he columns as in Table 6. Addi ionally poo e municipali ies (wi h a highe pe cen age o
SIIbene
) a e
less a ac i e, signi ican a he 5% le el in he i s column o Table 7. Mo eo e , sala y g ow h exhibi s a
posi i e and signi ican e ec on ne mig a ion in he i s , second and ou h column o Table 7 and he
ou h column o Table 8 a he 5% signi icance le el. The pe cen age o ho el gues s has a nega i e and
signi ican impac on he a ac i eness o municipali ies in he i s and second column o Table 7, and a
posi i e e ec in he hi d column o Table 8.
38
Table 6: Baseline model eg essions
(1) (2) (3) (4)
Va iables nm nm nm nm
sala yg ow h −10.00354 0.00189 0.000620 0.00204
(0.00421) (0.00288) (0.00252) (0.00210)
HEwo ke s −1-0.0307 0.00466 0.00577 0.00980
(0.0284) (0.0219) (0.0196) (0.0176)
UIbene −1-0.0450 -0.0473** -0.0511*** -0.0408***
(0.0281) (0.0184) (0.0151) (0.0150)
SIIbene −1-0.0776 0.00838 -0.00983 -0.00602
(0.0484) (0.0244) (0.0207) (0.0172)
ho elgues s −15.50e-05 -1.52e-05 8.33e-05
(0.000197) (0.000162) (0.000177)
pPIT −10.0327 0.0236
(0.0219) (0.0169)
logT o Exp −1-0.0198
(0.0881)
logDeb Mun −10.0255
(0.0740)
Cons an 0.412 0.281 0.528*** 0.437***
(0.329) (0.205) (0.142) (0.130)
Obse a ions 1,865 2,725 3,483 4,443
R-squa ed 0.562 0.666 0.662 0.662
No. o municipal-
i ies
278 278 278 278
Adj. R20.558 0.663 0.660 0.661
No es: All eg essions include municipal and yea - ixed e ec s, and co e 278 mainland Po ugal municipali ies.
Fi s column co e s he pe iod om 2015 o 2022, second column om 2009 o 2023, hi d and ou h column om 2007 o
2023.
Robus s anda d e o s clus e ed by municipali y in pa en heses.
Signi icance le el: *** p<0.01, ** p<0.05, * p<0.1.
39
Table 7: Baseline model eg essions wo yea lags
(1) (2) (3) (4)
Va iables nm nm nm nm
sala yg ow h −20.00818** 0.00697** 0.00483* 0.00447**
(0.00392) (0.00294) (0.00258) (0.00226)
HEwo ke s −2-0.000744 0.00396 0.00364 0.00197
(0.0272) (0.0257) (0.0225) (0.0197)
UIbene −2-0.0381 -0.0377** -0.0484*** -0.0401***
(0.0253) (0.0174) (0.0127) (0.0133)
SIIbene −2-0.109** 0.00717 -0.0104 -0.000523
(0.0476) (0.0235) (0.0193) (0.0158)
ho elgues s −2-0.000953*** -0.000420** -0.000192
(0.000228) (0.000202) (0.000248)
pPIT −20.0290 0.0319*
(0.0227) (0.0175)
logT o Exp −20.0548
(0.101)
logDeb Mun −2-0.0610
(0.0832)
Cons an 0.470 0.112 0.416*** 0.297**
(0.300) (0.203) (0.137) (0.121)
Obse a ions 1,865 2,466 3,205 4,165
R-squa ed 0.581 0.657 0.664 0.670
No. o municipal-
i ies
278 278 278 278
Adj. R20.577 0.655 0.662 0.669
No es: All eg essions include municipal and yea - ixed e ec s. All models co e 278 mainland Po ugal municipali ies excep
he ou h.
Fi s column co e s he pe iod om 2016 o 2023, second column om 2010 o 2023, hi d and ou h column om 2008 o
2023.
Robus s anda d e o s clus e ed by municipali y in pa en heses.
Signi icance le el: *** p<0.01, ** p<0.05, * p<0.1.
40
Table 8: Baseline model eg essions h ee yea lags
(1) (2) (3) (4)
Va iables nm nm nm nm
sala yg ow h −30.00618 0.00608 0.00398 0.00569**
(0.00536) (0.00376) (0.00293) (0.00257)
HEwo ke s −30.0248 -0.00421 -0.00115 -0.00724
(0.0247) (0.0252) (0.0214) (0.0197)
UIbene −3-0.0620** -0.0347* -0.0471*** -0.0366***
(0.0265) (0.0181) (0.0114) (0.0126)
SIIbene −3-0.0753 0.0298 0.00612 0.0141
(0.0550) (0.0245) (0.0185) (0.0144)
ho elgues s −3-4.30e-07 0.000189 0.000275**
(0.000109) (0.000121) (0.000132)
pPIT −30.0109 0.0205
(0.0294) (0.0183)
logT o Exp −30.156*
(0.0836)
logDeb Mun −3-0.0556
(0.0956)
Cons an 0.621** -0.260 0.377*** 0.294***
(0.308) (0.193) (0.116) (0.110)
Obse a ions 1,629 2,211 2,934 3,888
R-squa ed 0.514 0.657 0.670 0.682
No. o municipal-
i ies
278 278 278 278
Adj. R20.510 0.655 0.668 0.681
No es: All eg essions include municipal and yea - ixed e ec s. All models co e 278 mainland Po ugal municipali ies.
Fi s column co e s he pe iod om 2017 o 2023, second column om 2011 o 2023, hi d and ou h column om 2009 o
2023.
Robus s anda d e o s clus e ed by municipali y in pa en heses.
Signi icance le el: *** p<0.01, ** p<0.05, * p<0.1.
41
O e all, s ong economic p ospec s in he sho e m (1 o 3 yea s p io ), such as wage g ow h enhance
he a ac i eness o municipali ies. Howe e he e ec is only signi ican when conside ing second and
hi d-o de lags, sugges ing ha indi iduals may no base mig a ion decisions on immedia e wage g ow h
changes as hey may no no know hem, bu a he on wage g ow h om wo o h ee yea s p io . Labou
ma ke condi ions a e also a consis en p edic o , always p esen ing a nega i e coe icien , while ho el
gues s exhibi mixed esul s. In sho i is possible o conclude ha ne mig a ion is no solely in luenced
by he p e ious yea condi ions, bu shaped by ac o s o e a leas he pas h ee yea s. Howe e , no
e e y a iable eached a signi ican esul , his may indica e ha he sho e m is no enough o p edic
he ne mig a ion o jus a single yea .
The p ocess o mig a ion is con inuous and in o ma ion ha indi iduals conside may no only be based
on he p eceding yea (1s 2nd o 3 d o de lags), bu on an a e age o p e ious yea s, ha cap u es a
wide iew o he de elopmen o a place. An inc ease in he numbe o unemployed may no only a ec
he nex yea ne mig a ion bu he ollowing yea s, he same applies o sala y g ow h ha may no only
con ibu e o inc easing ne mig a ion o a single yea bu se e al. Hence addi ional eg essions we e
es ima ed using i e, ou and h ee yea pe iods wi h a e aged a iables.
6.2 Fi e-yea pe iod model
In o de o cap u e long un e ec s o independen a iables on ne mig a ion, ixed e ec s models wi h
5 yea -pe iod a e aged a iables we e es ima ed. The e ec s o sala y g ow h a e in line wi h he p e ious
esul s, ha ing a posi i e coe icien o all he columns, bu ailing o achie e s a is ical signi icance a
leas a he 5% le el. The pe cen age o unemploymen insu ance bene icia ies, has a nega i e coe icien
signi ican a he 1% and 5% le el, o he las h ee columns. The pe cen age o ho el gues s has a posi i e
and signi ican coe icien and las ly o al expendi u es o municipali ies has a nega i e and signi ican
coe icien . This may possibly mean ha on a longe e m pe spec i e municipali ies wi h be e job ma ke
condi ions, and ameni ies a e mo e a ac i e. While hose whe e he local go e nmen spends mo e a e
less a ac i e, as he highe spending may equi e highe local axes.
In addi ion o he p e ious, addi ional eg essions we e es ima ed using 4 and 3 yea pe iods in he
appendix ables B.1 and B.2. Fo he ou yea pe iod models, he pe cen age o unemploymen insu ance
bene icia ies keeps he nega i e coe icien and signi icance o all columns, sala y g ow h has a posi i e
coe icien , bu ne e eaching s a is ical signi icance. In he case o he pe cen age o ho el gues s,
p esen ing a posi i e and signi ican coe icien o all he columns. The logged municipal o al expendi u e,
p esen s a nega i e and signi ican coe icien , lowe han he i e yea pe iod model. Con a y o he
42
Table 9: Fi e-yea pe iod eg essions
(1) (2) (3) (4)
Va iables nm nm nm nm
sala yg ow h 0.0100 0.0131 0.0158 0.0223*
(0.0155) (0.0131) (0.0118) (0.0118)
Hewo ke s -0.0477* -0.01000 -0.0145 -0.00978
(0.0285) (0.0218) (0.0208) (0.0200)
UIbene -0.0547* -0.0738*** -0.0542** -0.0462**
(0.0309) (0.0219) (0.0226) (0.0201)
SIIbene 0.00990 0.0248 0.00634 0.00704
(0.0379) (0.0242) (0.0241) (0.0220)
ho elgues s 0.000400** 0.000451*** 0.000424***
(0.000175) (0.000170) (0.000155)
pPIT 0.0203 0.00539
(0.0310) (0.0221)
logT o Exp -0.617***
(0.235)
logDeb Mun 0.0360
(0.104)
Cons an 0.224 0.494** 0.422** 0.370**
(0.330) (0.219) (0.187) (0.164)
Obse a ions 718 877 971 1,112
R-squa ed 0.801 0.751 0.742 0.735
No. o municipal-
i ies
278 278 278 278
Adj. R20.798 0.749 0.740 0.734
No es: All eg essions include municipal and pe iod- ixed e ec s, and co e 278 mainland Po ugal municipali ies.
Robus s anda d e o s clus e ed by municipali y in pa en heses.
Signi icance le el: *** p<0.01, ** p<0.05, * p<0.1.
43
expec ed he pe cen age o wo ke s wi h high educa ion p esen s a nega i e coe icien signi ican a he
5% le el o he i s column.
Despi e being in line wi h he p e ious ables, able B.2 only achie ed signi ican esul s o he un-
employmen insu ance bene icia ies (second and hi d column), he pe cen age o ho el gues s o all
columns, and he pe cen age o highly educa ed wo ke s, again ha ing a nega i e and signi ican coe i-
cien in he i s column.
The labou ma ke a iable, unemploymen insu ance bene icia ies, was he mos consis en ac oss
he di e en pe iods used. Simila ly, he pe cen age o ho el gues s, ho el ac i i y seems o con ibu e
posi i ely o he a ac i eness o municipali ies, in a longe e m pe spec i e, con a y wi h wha was ound
in some o he baseline lagged models. The municipal o al expendi u e has a nega i e and signi ican
coe icien o he 2 longes pe iods conside ed. Which may suppo he possibili y ha high spending
may lead o highe local axes, making he municipali y less a ac i e, o ha municipali ies ha a e
acing popula ion decline a e inc easing expenses o coun e ac i .
44
A Appendix - Figu es
Figu e A.1: Municipal p ima y sec o employmen a ia ion 2001-2021
51
B Appendix - Tables
Table B.1: Fou -yea pe iod eg essions
(1) (2) (3) (4)
Va iables nm nm nm nm
sala yg ow h 0.0192 0.00708 0.0158 0.0159*
(0.0132) (0.0133) (0.0101) (0.00878)
Hewo ke s -0.0571** -0.0211 -0.00896 0.00150
(0.0270) (0.0223) (0.0185) (0.0180)
UIbene -0.0620** -0.0698*** -0.0531*** -0.0387**
(0.0281) (0.0222) (0.0159) (0.0168)
SIIbene 0.0178 0.0221 0.00118 -0.00789
(0.0427) (0.0246) (0.0202) (0.0189)
ho elgues s 0.000412** 0.000455*** 0.000424***
(0.000202) (0.000165) (0.000163)
pPIT 0.0193 0.00338
(0.0279) (0.0221)
logT o Exp -0.454**
(0.202)
logDeb Mun 0.0247
(0.0992)
Cons an 0.254 0.370 0.454*** 0.396***
(0.302) (0.234) (0.140) (0.139)
Obse a ions 806 974 1,222 1,390
R-squa ed 0.813 0.779 0.733 0.710
No. o municipal-
i ies
278 278 278 278
Adj. R20.810 0.777 0.731 0.708
No es: All eg essions include municipal and pe iod- ixed e ec s, and co e 278 mainland Po ugal municipali ies.
Robus s anda d e o s clus e ed by municipali y in pa en heses.
Signi icance le el: *** p<0.01, ** p<0.05, * p<0.1.
52
Table B.2: Th ee-yea pe iod eg essions
(1) (2) (3) (4)
Va iables nm nm nm nm
sala yg ow h -0.000350 -0.000739 0.00387 0.00778
(0.0111) (0.00641) (0.00538) (0.00561)
Hewo ke s -0.0859** 0.00976 0.00829 0.0160
(0.0384) (0.0180) (0.0166) (0.0166)
UIbene -0.0471* -0.0585** -0.0421** -0.0290*
(0.0283) (0.0236) (0.0179) (0.0170)
SIIbene 0.00353 0.0253 0.00628 -0.00307
(0.0473) (0.0206) (0.0185) (0.0170)
ho elgues s 0.000655*** 0.000408** 0.000372**
(0.000215) (0.000168) (0.000144)
pPIT -0.0111 0.00623
(0.0255) (0.0171)
logT o Exp -0.128
(0.154)
logDeb Mun 0.0477
(0.0894)
Cons an 0.364 0.323 0.335** 0.282**
(0.346) (0.203) (0.148) (0.136)
Obse a ions 810 1,377 1,681 1,946
R-squa ed 0.781 0.786 0.755 0.736
No. o municipal-
i ies
278 278 278 278
Adj. R20.778 0.785 0.753 0.735
No es: All eg essions include municipal and pe iod- ixed e ec s, and co e 278 mainland Po ugal municipali ies.
Robus s anda d e o s clus e ed by municipali y in pa en heses.
Signi icance le el: *** p<0.01, ** p<0.05, * p<0.1.
