Do resource rents drive urbanization and structural transformation? A global analysis

This paper provides the first causal estimate of the impact of mineral price changes on the local population and sectoral employment shares in a global sample of cities. We find that increases in the prices of minerals extracted from nearby mines lead to local employment reallocation away from agriculture and primarily toward low-skilled services, without crowding out manufacturing activities. While the city population grows, there is limited evidence for mining booms driving large-scale urbanization. Cities in Sub-Saharan Africa exhibit exceptionally strong responses to mining booms. These results suggest that resource-led structural transformation could present a new development path for resource-rich developing countries.