Key facts
- Nearly 65% of OECD member states are experiencing an easing of national population concentration in their capitals.
- Japan and South Korea are bucking this trend, with their metropolitan areas attracting more residents.
- High housing prices and the rise of remote work are cited as key factors driving population shifts away from major urban centers globally.
- In Japan, the metropolitan population concentration was 27% in 2023 and is projected to reach 27.6% by 2030.
- South Korea's capital region concentration stood at 43.3% in 2023, the highest among 37 OECD countries analyzed.
- The primary drivers for moving to Tokyo and Seoul remain the pursuit of higher wages and better job opportunities.
Globally, a significant trend of population de-concentration from capital cities is underway, with nearly 65% of OECD member states experiencing this shift. This phenomenon is largely attributed to soaring housing prices in major urban centers and the widespread adoption of remote work following the COVID-19 pandemic. As a result, many people are seeking opportunities in smaller cities or rural areas.
However, Japan and South Korea stand in stark contrast to this global pattern. Both nations are witnessing a continued influx of people into their metropolitan areas, primarily driven by the pursuit of higher incomes and more robust job markets. Despite the escalating costs associated with living in these expensive regions, the economic prospects offered by Tokyo and Seoul remain a strong draw for residents.
Data from the Nihon Keizai Shimbun, based on the UN's 'World Urbanization Prospects 2025,' reveals that the average capital-region population share among 37 OECD countries peaked in 2021 and has been declining since. Countries like Germany and Norway have seen their concentration levels fall. For instance, the Paris metropolitan area's population growth has slowed considerably, with the Île-de-France region experiencing a net outflow of residents through migration.
The economic principle of 'agglomeration economies,' where clustering fosters innovation and cost-sharing, is being outweighed in many places by the negative consequences of excessive concentration, such as traffic congestion, reduced productivity, and prohibitively high housing costs. The OECD noted that housing prices in metropolitan areas with over 1.5 million people have increased by approximately 68% over the last decade, significantly more than in smaller cities.
In Japan, the metropolitan population concentration was 27% in 2023 and is projected to rise to 27.6% by 2030. South Korea's capital region concentration increased from 42.1% in 2010 to 43.3% in 2023, marking it as the highest among the analyzed OECD countries. This persistent concentration in Seoul and its surrounding areas is attributed to the continued clustering of jobs, educational institutions, major corporations, and government functions.