1. Urbanization and Rural-Urban Migration: Theory and Policy
Chapter 7
Urbanization and Rural-Urban Migration: Theory and Policy

2. The Migration and Urbanization Dilemma
Urbanization: trends and projections
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3. Figure 7.1 Urbanization and Per Capital Income in Selected Countries
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4. Figure 7.2 Urbanization across Time and Income Levels
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5. Figure 7.3 Proportion of Urban Population by Region, 1950-2030
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6. Figure 7.4 Megacities: Cities with Ten Million or More Inhabitants
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7. Figure 7.5 Estimated and Projected Urban and Rural Population of the More and Less Developed Regions,
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8. Figure 7.6 Annual Growth of Urban and Slum Populations, 1990-2001
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9. The Role of Cities
Agglomeration economies, Urbanization economies, Localization economies
Industrial districts
Efficient urban scale
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10. The Urban Giantism Problem
First- city bias
Causes of Urban Giantism
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11. Table 7.1 Population of the Largest and Second-Largest Cities in Selected Countries (millions)
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12. Figure 7.6 Annual Growth of Urban and Slum Populations, 1990-2001
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13. The Urban Informal Sector
Importance of the informal sector in developing economies
Policies for the Urban Informal Sector
Women in the Informal Sector
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14. Figure 7.8 Importance of Informal Employment in Selected Cities
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15. Figure 7.9 Youth Unemployment Rates, 1995 and 2005
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16. Migration and Development
Rural-to-urban migration was viewed positively until recently
The current view is that this migration is greater than the urban areas’ abilities to
Create jobs
Provide social services
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17. Figure 7.10 Components of Migration in Selected Countries
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18. Toward an Economic Theory of Rural-Urban Migration
A verbal description of the Todaro model
Migration is a rational decision
The decision depends on expected rather than actual wage differentials
The probability of obtaining a city job is inversely related to the urban unemployment rate
High rates of migration are outcomes of rural urban imbalances
A Diagrammatic Presentation
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19. Figure 7.11 Schematic Framework for Analyzing the Rural-to-Urban Migration Decision
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20. Figure 7.12 The Harris-Todaro Migration Model
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21. Toward an Economic Theory of Rural-Urban Migration
Where
WA is agricultural income,
LM is employment in manufacturing
LUS is total urban labor pool
WM is the urban minimum wage
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22. Toward an Economic Theory of Rural-Urban Migration
Five Policy Implications
Reduction of urban bias
Imbalances in expected income opportunities is crucial
Indiscriminate educational expansion fosters increased migration and unemployment
Wage subsidies and scarcity factor pricing can be counterproductive
Programs of integrated rural development should be encouraged
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23. A Comprehensive Migration and Employment Strategy
Create a urban-rural balance
Expand small, labor intensive industries
Eliminate factor-price distortion
Choose appropriate technologies
Modify the linkage between education and employment
Reduce population growth
Decentralize authority
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24. Case Study: India
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25. Case Study: Botswana
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26. Concepts for Review Agglomeration externalities Congestion
Efficiency wage
Expected income
Induced migration
Informal sector
Labor turnover
Localization economies
Present value
Rural-urban migration
Social capital
Todaro migration model
Urban bias
Urbanization economies
Wage subsidy
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