Effective per capita municipal expenditures correlated with population changes in small and medium-sized cities in Japan

In recent years, urban policy-makers have been urged to adopt the development of urban policies for shrinking cities from an urban management perspective. However, urban management in shrinking cities is a difficult problem because it is fiscally restrictive compared with cities with growing populations. This study aims to clarify the types of effective per capita municipal expenditures correlated with population changes in small and medium-sized cities. The research design adopted cross-sectional studies from 2007 to 2022 for all Japanese small and medium-sized cities with populations of less than 200,000. The nonlinear relationship was analyzed via the eXtreme gradient boosting algorithm. As a result, this study revealed 1288 shrinking cities, accounting for 82.56% of all small and medium-sized cities in Japan. For the shrinking cities, this study identified the types of per capita municipal expenditures that correlate with population change: population change was correlated with welfare expenditures. Specifically, the population grew in cities that increased in per capita expenditures on children and decreased in those on welfare recipients and the older population. Our findings suggest that municipal policy-makers should prioritize per capita expenditures on child welfare to sustain the population in small and medium-sized cities.