An Empirical Evidence from Two Declining-Population Areas Supported by the Local Extinction Response Fund: Implications for Policy

Abstract

The purpose of this study is to empirically analyze the impact of the Local Extinction Response Fund on mitigating local population decline and fostering population regrowth. For this analysis, we selected areas that experienced population regrowth following their receipt of the Local Extinction Response Fund in September 2022. We examined causal relationships between population size, net in-migration increases, and the benefits of the fund in these areas. In general, the differences in average population change rate, population size, and net migration between areas receiving the fund and those not experiencing population decline reduced. Although the case areas showed an increase in population size and net in-migration, no causal relationship with the Local Extinction Response Fund was observed. Our results provide policy implications for enhancing the effectiveness of the Local Extinction Response Fund, including redesigning its scale to more effectively address local population decline, ensuring substantial budget allocations, and implementing continuous performance evaluations.