Centralization and Urbanization Tendencies in Norway

Abstract

This chapter examines observed regional inequalities and centralization tendencies in Norway. Small, rural, municipalities experienced a favourable population development from 1970 to the mid-1980s. After this, the percentage population growth has been strongest in the largest municipalities/cities, and this tendency has accelerated during the last 10–15 years. Data post-1970 strongly support the reasonable hypothesis that population growth is positively related to centrality. The major source of changes lies within the labour market regions, whereas the changes between the regions are modest. Jobs have not become more centralized than households over the period.

A conceptual model is developed, offering a useful taxonomy of municipalities in three dimensions: the unemployment rate, the employment growth, and housing prices. This provides a classification that contributes to clarify the changes in the urban-rural divide. The discussion demonstrates that distinguishing between different categories is important, since different explanations of centralization and regional disparities call for different menus of policy instruments.

We study the relationship between population growth, unemployment rates, and employment growth in Norwegian municipalities, to distinguish between disequilibrium and equilibrium explanations of the situation in regional labour markets. At a national level our results indicate that neoclassical adjustments dominate weakly over amenity-based mechanisms. However, results from many regions support the hypothesis that amenity-based adjustments are dominant for municipalities within a labour market region. One possible explanation is that the diversity in job opportunities is considered as an amenity. A thicker labour market is better fit to meet the demand of workers with specific qualifications.

Citation

Andersson, M., Håkansson, P.G. and Thorsen, I. (2019), "Centralization and Urbanization Tendencies in Norway", Håkansson, P.G. and Bohman, H. (Ed.) Investigating Spatial Inequalities, Emerald Publishing Limited, Leeds, pp. 31-54. https://doi.org/10.1108/978-1-78973-941-120191003