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

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  • Huang, Qing
  • Xie, Victoria Wenxin
  • You, Wei

Abstract

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.

Suggested Citation

  • Huang, Qing & Xie, Victoria Wenxin & You, Wei, 2026. "Do resource rents drive urbanization and structural transformation? A global analysis," Journal of Development Economics, Elsevier, vol. 180(C).
    • Handle: RePEc:eee:deveco:v:180:y:2026:i:c:s0304387825002603
    DOI: 10.1016/j.jdeveco.2025.103709
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    Keywords

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    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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