Spatio-sectoral heterogeneity and population–employment dynamics: some implications for territorial development

Grounded in the general equilibrium framework of regional adjustment models, this paper studies how the spatial distribution of sectoral employment can affect the intra-regional spatial location of a population, and so affect territorial development. Although spatial interactions, spatial heterogeneity and sectoral heterogeneity have been introduced in these models, no empirical studies reveal how spatio-sectoral heterogeneity affects the intra-regional distribution of population and jobs. This paper explores this effect through a complex set of interdependencies among the regional population, employment in the regional economic sectors and their respective regional neighbours within the different regional typologies (urban, semi-urban and rural areas), as suggested by the concept of proximity developed by Torre in 2019. We use a system of simultaneous equations to focus on the phenomenon of rural depopulation for the 542 municipalities of the Valencian region of Spain. The results provide evidence for the relevance of spatio-sectoral dynamics, suggesting that reversing depopulation in rural areas depends strongly on the services sector.