REGIONAL EFFECTS OF MILITARY BASE CLOSURES: THE CASE OF SWEDEN

The purpose of this paper is to investigate regional effects of military base closures in Sweden during the last decades. Our analysis is based on a regional growth model, where two equations are estimated; one equation describing the average income growth rate and one equation describing the net migration rate. The data set is a panel of 31 Swedish municipalities covering the period 1983–1998. Our main finding is that a closure of a military base has not had any significant impact on the subsequent average income growth rate nor the net migration rate in the affected municipalities. One potential explanation for these results relates to the labour market and the composition of the labour force.