Has South Korea’s policy of relocating public institutions been successful? A case study of 12 agglomeration areas under the Innovation City Policy

Abstract

South Korea’s Innovation City policy aims to balance the geography of economic activity across the country by relocating public institutions to local cities. The economic impact of relocating public institutions to local cities has been assessed by examining job creation, public spending, the quality of public services or demands for housing and employment in donor cities. However, as economies have become increasingly knowledge-based, the attractiveness of urban areas to young workers has become a metric to measure an area’s economic development potential. There is a paucity of research on the economic impact of relocating public institutions that analyses the attractiveness of the destination cities for young people. Thus, this paper examines the migration of young people to evaluate the economic impact of relocating public institutions on the balanced geography of economic activity across the country. The examination was conducted by analysing the effects of (1) agglomeration area location type and (2) general place quality on young people’s migration. Quasi-experimental research and panel regression (2010–2019) were conducted on 12 agglomeration areas. The findings revealed that relocating public institutions was more likely to attract young migrants than the control group, whereas outskirt agglomeration areas attracted and retained young people more than inner city agglomeration areas. Relocating public institutions is a strategic means of attracting young people to local cities to balance the geography of economic activity. Here, the effect of relocating public institutions on young people’s migration varies depending on the location of agglomeration areas and the place quality of destination cities.