The Impact of Urban Shrinkage on Public Service Provision

Abstract

Against the backdrop of continuously declining global fertility rates and slowing population growth, urban shrinkage has become a significant trend in regional development, exerting profound impacts on the supply of public services, particularly in small and medium-sized cities and resource-based cities in China. Focusing on the impact of urban shrinkage on public service provision, this study constructs two-way fixed-effects models and mediation models for empirical testing based on panel data from 283 prefecture-level cities in China from 2011 to 2023. The findings reveal that: (1) urban shrinkage significantly suppresses the level of public service provision; (2) fiscal pressure plays a partial mediating role, meaning that urban shrinkage indirectly leads to reduced public service provision by intensifying local fiscal pressure; (3) heterogeneity analysis indicates that this negative effect is more pronounced in the central region, non-urban agglomeration areas, and non-resource-based cities. The study suggests that urban shrinkage should be viewed rationally, promoting "smart shrinkage" and refined governance, optimizing the structure of public service provision and fiscal expenditure efficiency, thereby enhancing urban resilience and residents' well-being. This research provides theoretical foundations and policy implications for the governance of public services in shrinking cities under the context of negative population growth.