Copyright © 2003 Pearson Education, Inc.

Chapter 8 Slide 1
Urbanization and Rural-Urban
Migration: Theory and Policy

Chapter 8

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 2

 The Migration and Urbanization
Dilemma
 Urbanization: trends and projections

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 3

 Figure 8.1 Urbanization versus
GNP

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 4

 Figure 8.2 Urbanization Across
Time and Income Levels

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 5

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 6
Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 7
 Figure 8.3 Megacities: Cities with
10 Million or More Inhabitants

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 8

 Figure 8.4 Estimated and Projected
Urban and Rural Population of More and
Less Developed Regions, 1950-2030

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 9

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 10
Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 11
 The Role of Cities

 Industrial districts
 Efficient urban scale
 The urban giantism problem

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 12

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 13
 The Role of Cities

 Industrial districts
 Efficient urban scale
 The urban giantism problem
 First city bias

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 14

 The Role of Cities

 Industrial districts
 Efficient urban scale
 The urban giantism problem
 First city bias
 Causes of urban giantism

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 15

 Figure 8.5 Politics and Urban
Concentration

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 16

 The Role of Cities

 Industrial districts
 Efficient urban scale
 The urban giantism problem
 First city bias
 Causes of urban giantism
 The urban informal sector

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 17

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 18
 Figure 8.6 The Importance of
Informal Employment in Selected
Cities

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 19

 The Role of Cities

 Industrial districts
 Efficient urban scale
 The urban giantism problem
 First city bias
 Causes of urban giantism
 The urban informal sector
 Policies for the urban informal sector

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 20

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 21
 The Role of Cities
 Industrial districts
 Efficient urban scale
 The urban giantism problem
 First city bias
 Causes of urban giantism
 The urban informal sector
 Policies for the urban informal sector
 Women in the informal sector
Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 22
 Urban Unemployment

 Open unemployment rates in urban

areas are very high

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 23

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 24
 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

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 25

 Figure 8.7 Components of
Migration

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 26

 Toward an Economic Theory of
Rural-Urban Migration
 A verbal description of the Todaro model

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 27

 Figure 8.8 Schematic Framework for
Analyzing the Migration Decision

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 28

 Toward an Economic Theory of
Rural-Urban Migration
 A verbal description of the Todaro model
 A diagrammatic presentation of the
Todaro model

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 29

 Figure 8.9 The Harris-Todaro
Migration Model

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 30

 Toward an Economic Theory of
Rural-Urban Migration

LM
WA  (W M )
LUS
Where WA is agricultural income,
LM is employment in manufacturing
LUS is total urban labor pool
WM is the urban minimum wage

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 31

 Toward an Economic Theory of
Rural-Urban Migration
 A verbal description of the Todaro model
 A diagrammatic presentation of the
Todaro model
 Five policy implications

Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 32

 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
Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 33
 Concepts for Review
 Agglomeration  Present value
externalities  Rural-urban
 Congestion migration
 Efficiency wage  Social capital
 Expected income  Todaro migration
 Induced migration model
 Informal sector  Urban bias
 Labor turnover  Urbanization
 Localization economies
economies  Wage subsidy
Copyright © 2003 Pearson Education, Inc. Chapter 8 Slide 34