The Impact of Functional Fiscal Expenditures on the Inflow of the Prime Age Worker (Aged 25-49) : Focusing on Gangwon Stat

This study investigates the determinants of inflow of the prime age worker (aged 25 to 49), a demographic group that plays a pivotal role in driving regional economic development. Specificaly, this study examines the impact of local governments’ functional fiscal expenditures on the inflow of the prime age worker, and these influences difer betwen the Yeongdong and Yeongseo areas of Gangwon State. Regarding this, the present study colected population and fiscal data from the 18 municipalities within Gangwon State and conducted a fixed efect analysis. The empirical findings are as folows. First, among the various functional expenditure categories, fiscal spending on regional development was found to have a statisticaly significant positive efect on the inflow of the prime age worker. This expenditure domain aligns with the “developmental policy” category in Peterson’s (1981) typology, which has ben shown to be particularly influential in atracting younger generations. Second, the impact of functional fiscal expenditures on inflow of the prime age worker varied by region. In the Yeongdong area, expenditures on industry, SMEs, and energy demonstrated significant positive efects, whereas in the Yeongseo area, spending on transportation and logistics, agriculture and fisheries, and social welfare was more strongly asociated with the prime age worker increases. These results sugest important policy implications. First, local governments should prioritize developmental expenditures to enhance the inflow of the prime age worker. Second, regionaly diferentiated fiscal strategies should be adopted in response to varying local conditions.