The Domino Effect: Exploring Residential Mobility in the Aftermath of Municipal Mergers

In this article, we investigate the impact of municipal mergers on residential mobility in a quasi-natural experiment setting by examining how the local economic environment and neighbourhood composition respond to the loss of local public administration. Using comprehensive neighbourhood-level data from Denmark spanning 1996 to 2015, we find that the loss of the town hall triggers emigration, leading to a reduction in locally supplied public goods. This affects the local housing market and job availability, leading to lower housing prices, higher wages, and longer commutes. Ultimately, the loss of the town hall has major negative consequences for the inhabitants.