Regional Effects of Military Closures: The Case of Sweden

This paper concerns the effects of military closures on the local growth pattern in Sweden during the last decades. The main issue is to analyze to what extent the closures have affected the subsequent average income growth and net migration rates at the local level. The analysis is based on a data set covering Swedish municipalities with military bases during the period 1983-1998. Our main finding is that the closures have not had any significant impact on the subsequent average income growth rate or the net migration rate in the affected municipalities compared to other municipalities. However, in accordance with previous studies based on Swedish data, we find the initial endowment of human capital to have a positive impact on the subsequent growth rate. ∗The authors would like to thank Keith Schwer and participants at the WRSA annual meeting for useful comments. The Wallander-Hedelius Foundation is gratefully acknowledged for financial support. †Address: Department of Economics, Ume̊a University, SE-901 87 Ume̊a, Sweden. Telephone: +46-90-786 95 85. E-mail: [email protected] ‡Address: Centre for Regional Science, Ume̊a University, SE-901 87 Ume̊a, Sweden. Telephone: +46-90-786 95 40. E-mail: [email protected] §Address: Department of Economics, Ume̊a University, SE-901 87 Ume̊a, Sweden. Telephone: +46-90 786 68 06. E-mail: [email protected]