Demographic Decline and Gaps in the Provision of Public Services in Southern Italy: a Vicious Circle to Defuse

Over the next fifty years the Southern population will reduce by 40%; the decline will be concentrated in the younger and working age classes, driven by significant migratory flows towards the rest of the country. The demographic decline can be considered both as a consequence and a cause of the economic decline of the South: it is a consequence since the outflow of young graduates reflects particularly unfavorable labor market and context conditions; it is a cause, since the impoverishment of human capital further reduces the ability to produce wealth and well-being. Economic policy can try to address this vicious circle, on the one hand, with actions to support the productive environment in order to create job and career opportunities locally and, on the other, by retaining people through an improvement in the provision of local public services. These two objectives are interdependent and equally crucial: acting in one direction alone, neglecting the other, would make any action ineffective. This work focuses on the second set of policies. After summarizing the salient features of the demographic evolution expected in the South, we review the main indications of the economic literature regarding the relationship between the supply of local public goods and the mobility choices of individuals. We then focus on the territorial characteristics of two essential public services, aimed respectively at the protection of the universal right to health and the right to education. The analysis concludes with the description of some recent policy initiatives potentially effective in improving local public provision in the South and the main factors that could compromise their effectiveness.