The Mortality Transition, Malthusian Dynamics, and the Rise of Poor Mega-Cities

The largest cities in the world today lie mainly in relatively poor countries, which is a departure from historical experience, when the largest cities were typically found in the richest places. Using new data on the demographic history of the 100 largest mega-cities of today, we establish several new stylized facts distinguishing poor mega-cities from historically rich mega-cities. To account for these facts we develop a model that combines Malthusian models of endogenous population growth with urban models of agglomeration and congestion, and it shows that the absolute growth of the urban population determines whether a city becomes a poor or rich mega-city. We posit that poor mega-cities arose in part because the post-war mortality transition raised their absolute growth above a crucial threshold. Poor mega-cities continue to grow in size but not in living standards because their poverty keeps population growth high. By expanding prior to the mortality transition, historical mega-cities experienced smaller absolute growth that allowed them to sustain wage growth and kept population growth relatively low.