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  Chapter   7   Lecture  ‐  Urbanization   and   Rural ‐ UrbanMigration:   Theory   and   Policy 1 Chapter 7 Lecture -Urbanization and EC348 Development Economics  1 Rural-Urban Migration: Theory and Policy Urban Population and Per Capita Income Across Selected Countries 2 Urbanization -Context and Issues ã What is urbanization?  –  Urbanization is the agglomeration of population in cities: ã Growth of the proportion of the population living in cities.  –  Demographic process:  Population growth(Natural increase or migration) 3  (natural increase or migration).  –  Infrastructure process: ã Expansion of urban infrastructures and land use.  –  Economic process: ã Creation of secondary, tertiary and quaternary sectors.  –  Creates a society where values and lifestyles are urban. Expansion of infrastructures Context and Issues ã Causes of urbanization  –  Increased social interactions.  –  Institutions representing and supporting a society. 4  –  Linked with agricultural surpluses.  –  Increased economic efficiency.  –  Specialization, economies of scale and economies of agglomeration.  Chapter   7   Lecture  ‐  Urbanization   and   Rural ‐ UrbanMigration:   Theory   and   Policy 2 Context and Issues ã The urban explosion  –  Urban population growth is the most important change in population geography.  –  About 50% of the global population, 3 billions, lives in cities.  –  Almost all the oulation rowth between 5 2000 and 2030 will occur in cities.  –  By 2050, 6.2 billion people will live in cities, more than the current (2000) population.  –  Much of this growth will come in the world’s poorest countries. Context and Issues ã Developed countries  –  Developed countries are already urbanized.  –  Passed through the rural -urban migration process.  –  Concurrent with demographic transition and industrialization. ã Developing countries  6  –   .  –  Urbanization mainly occurs in developing countries. ã Will account for 93% of the 2 billion increase in the global urban population between 2000 and 2030. ã Latin America and East Asia is farthest along. ã The rest of Asia is a little further behind. ã Africa is urbanizing more slowly than the other world regions. Stages of Urbanization    t   i  o  n 80100Developed countries Terminal StageTransition StageInitial Stage Rural to urban migrationDemographic transition 7 Time    U  r   b  a  n   P  o  p  u   l 0204060 DevelopingcountriesLeast developedcountries RuralSocietyUrbanSocietyUrbanization Source: Adapted from Peters and Larkin, Population Geography, 1999 . Push -Pull Factors for Urbanization in the Third World PUSHPULLRuralUrban 8  Low employmentDemographic pressureEmployment marketBetter servicesLow barriersModernity Migration 18-35 Source: Adapted from Peters and Larkin, Population Geogr    aphy, 1999 .  Chapter   7   Lecture  ‐  Urbanization   and   Rural ‐ UrbanMigration:   Theory   and   Policy 3 Population of Major Cities 9 The Role of Cities ã Agglomeration economies: Urbanization (general) economies, localization (industry or sector) economies ã Saving on firm-to-firm, firm-to-consumer transportation ã Firms locating near workers with skills they need ã Workers locating near firms that need their skills ã Firms benefit from (perhaps specialized) infrastructure ã Firms benefit from knowledge spillovers in their and 10 related industries ã (Also: consumers may benefit from urban amenities) Industrial Districts and Clustering  Quality of clusters, or Industrial Districts, is a key to sectoral efficiency  Unfortunately a majority of developing countries have made only limited progress  China: a country that has made huge strides in generating industrial districts over the last decade Urbanization Costs, and EfficientUrban Scale ã But, cities also entail “congestion costs” ã Economically efficient urban scale (from point of view of productive efficiency) found were average costs for industries are lowest  11 , industrial specializations imply different city sizes ã More extensive (expensive) capital, infrastructure required in urban areas ã Smaller cities may be expected in labor-intensive developing countries Th e Urban GiantismProblem ã There may be general urban bias ã Cities are capital intensive so may expect large cities commonly located in developed countries ã But urbanization in developing countries has taken place at unexpectedly rapid pace ã Huge informal sectors in shantytowns, favelas ã Large fraction of workers outside formal sector ã  -   12  , serious issue in many developing countries ã There may be First-City Bias (favoring largest city) ã Import substitution industrialization: less trade, incentive to concentrate in a single city largely to avoid transportation costs ã “Bread and circuses” to prevent unrest (evidence: stable democracies vsunstable dictatorships) ã Hub and spoke transportation system (rather than web) makes transport costs high for small cities ã Compounding effect of locating the national capital in the largest city  Chapter   7   Lecture  ‐  Urbanization   and   Rural ‐ UrbanMigration:   Theory   and   Policy 4 The Urban Informal Sector ã Why promote the urban informal sector?  –  Generates surplus despite hostile environment  –  Creating jobs due to low capital intensivity  –  Access to (informal) training, and apprenticeships  13  –   - - workers  –  Uses appropriate technologies, local resources  –  Recycling of waste materials  –  More benefits to poor, especially women who are concentrated in the informal sector Importance of Informal Employment in Selected Cities 14 The Migration and Urbanization Dilemma ã As a pattern of development, the more developed the economy, the more urbanized ã But many argue developing countries are often excessively urbanized or too-rapidly urbanizing ã This combination suggests the migration and 15   ã Rural-to-urban migration was viewed positively until recently ã The current view is that this migration is greater than the urban areas’ abilities to  –  Create jobs  –  Provide social services Migration Issues ã Types of Migration  –  What are the major forms of migration? ã Selective Migration  –    16  selective process? ã Brain Drain  –  What is the extent of movements of skilled labor?
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