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Urban growth and uninsured rural risk: Booming towns in bust times

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  • Poelhekke, Steven

Abstract

Rapid urbanization also happens when economic growth and urban job creation are absent, such as in Africa and Latin America during the eighties. Why do some countries urbanize faster while having worse economic growth? This paper finds that higher aggregate agricultural risk induces rural-urban migration, providing an additional channel to explain the urbanization trend. Uninsurable expected risk will lead to rural-urban migration as a form of ex-ante insurance if households are liquidity constrained and cannot overcome adverse shocks. The effect is robust to controlling for the traditional view of urbanization driven by industrialization, and to several alternative explanations such as government spending.

Suggested Citation

  • Poelhekke, Steven, 2011. "Urban growth and uninsured rural risk: Booming towns in bust times," Journal of Development Economics, Elsevier, vol. 96(2), pages 461-475, November.
    • Handle: RePEc:eee:deveco:v:96:y:2011:i:2:p:461-475
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    2. Chankrajang, Thanyaporn, 2012. "The Effects of Rural Land Right Security on Labour Structural Transformation and Urbanization: Evidence from Thailand," WIDER Working Paper Series 041, World Institute for Development Economic Research (UNU-WIDER).
    3. Xiang Luo & Xinhai Lu & Zuo Zhang & Yue Pan, 2020. "Regional differences and rural public expenditure cyclicality: evidence from transitory and persistent shocks in China," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 65(2), pages 281-318, October.
    4. Kouakou Jean Fidele SIÉ, 2023. "Industrial policy and labour productivity growth in Africa: does the technology choice matter?," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 12(1), pages 1-24, December.
    5. Selod, Harris & Shilpi, Forhad, 2021. "Rural-urban migration in developing countries: Lessons from the literature," Regional Science and Urban Economics, Elsevier, vol. 91(C).
    6. repec:unu:wpaper:wp2012-41 is not listed on IDEAS
    7. Jamiu Adetola Odugbesan & Husam Rjoub, 2020. "Relationship Among Economic Growth, Energy Consumption, CO2 Emission, and Urbanization: Evidence From MINT Countries," SAGE Open, , vol. 10(2), pages 21582440209, April.
    8. Jedwab, Remi & Vollrath, Dietrich, 2015. "Urbanization without growth in historical perspective," Explorations in Economic History, Elsevier, vol. 58(C), pages 1-21.
    9. Sanghamitra Bandyopadhyay & Elliott Green, 2018. "Urbanization and mortality decline," Journal of Regional Science, Wiley Blackwell, vol. 58(2), pages 483-503, March.
    10. Mueller, Valerie & Sheriff, Glenn & Dou, Xiaoya & Gray, Clark, 2020. "Temporary migration and climate variation in eastern Africa," World Development, Elsevier, vol. 126(C).
    11. Brueckner, Jan K. & Lall, Somik V., 2015. "Cities in Developing Countries," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 1399-1455, Elsevier.
    12. Thanyaporn Chankrajang, 2012. "The Effects of Rural Land Right Security on Labour Structural Transformation and Urbanization: Evidence from Thailand," WIDER Working Paper Series wp-2012-041, World Institute for Development Economic Research (UNU-WIDER).
    13. Danning Du, 2017. "The causal relationship between land urbanization quality and economic growth: evidence from capital cities in China," Quality & Quantity: International Journal of Methodology, Springer, vol. 51(6), pages 2707-2723, November.
    14. Xiejun Cheng & Min Zhang & Jiayi Xu & Jingrong Xu & Decai Tang, 2023. "Research on the Impact of Sustainable Urbanization on Urban Rural Income Disparity in China," Sustainability, MDPI, vol. 15(6), pages 1-12, March.
    15. He, Xiaobo & Sim, Nicholas C.S., 2015. "Does economic growth affect urbanization? New evidence from China and the Chinese National Congress," Journal of Asian Economics, Elsevier, vol. 36(C), pages 62-71.
    16. Dou, Xiaoya & Gray, Clark & Mueller, Valerie & Sheriff, Glen, 2016. "Labor adaptation to climate variability in Eastern Africa:," IFPRI discussion papers 1537, International Food Policy Research Institute (IFPRI).

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