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Urbanization with and without Structural Transformation

Author

Listed:
  • Douglas Gollin

    (University of Oxford)

  • Remi Jedwab

    (George Washington University and LSE)

  • Dietrich Vollrath

    (University of Houston)

Abstract

We document several new facts regarding urbanization and structural change in developing countries and develop a model that can account for them. Most developing countries follow a standard pattern: urbanization is a by-product of either "push" from agricultural productivity growth or a "pull" from industrial productivity growth. In these countries urbanization occurs with structural transformation and cities are "production cities", with a mix of workers in tradable and non-tradable sectors. For a distinct subset of countries that rely on natural resource exports, however, urbanization has increased at an equally rapid pace, but it is not associated with an increased importance of manufacturing and services in GDP. In these countries urbanization has taken place in "consumption cities" where the mix of workers is heavily skewed towards non-tradable services. We adapt a standard model of structural transformation to explain how natural resources can both drive urbanization as well as shift the composition of the urban labor force. The model may help explain why natural resource exporters - and Sub-Saharan Africa in particular - have experienced urbanization without structural transformation, which has implications for the pace of long-run growth in these areas.

Suggested Citation

  • Douglas Gollin & Remi Jedwab & Dietrich Vollrath, 2013. "Urbanization with and without Structural Transformation," 2013 Meeting Papers 344, Society for Economic Dynamics.
    • Handle: RePEc:red:sed013:344
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    Cited by:

    1. Adriana Kocornik-Mina & Thomas K. J. McDermott & Guy Michaels & Ferdinand Rauch, 2020. "Flooded Cities," American Economic Journal: Applied Economics, American Economic Association, vol. 12(2), pages 35-66, April.
    2. Tiago Cavalcanti & Daniel Mata & Frederik Toscani, 2019. "Winning the oil lottery: the impact of natural resource extraction on growth," Journal of Economic Growth, Springer, vol. 24(1), pages 79-115, March.
    3. Robert Darko Osei & Charles Ackah & George Domfe & Michael Danquah, 2015. "Political settlements, the deals environment and economic growth: The case of Ghana," Global Development Institute Working Paper Series esid-053-15, GDI, The University of Manchester.
    4. Carolina Guevara, 2015. "The effect of trade on agglomeration within regions," Working Papers halshs-01233389, HAL.
    5. Gaggl, Paul & Gray, Rowena & Marinescu, Ioana & Morin, Miguel, 2021. "Does electricity drive structural transformation? Evidence from the United States," Labour Economics, Elsevier, vol. 68(C).
    6. Derek D. Headey, 2016. "The evolution of global farming land: facts and interpretations," Agricultural Economics, International Association of Agricultural Economists, vol. 47(S1), pages 185-196, November.
    7. Christiaensen, Luc & Todo, Yasuyuki, 2014. "Poverty Reduction During the Rural–Urban Transformation – The Role of the Missing Middle," World Development, Elsevier, vol. 63(C), pages 43-58.
    8. Cai,Yongyang & Selod,Harris & Steinbuks,Jevgenijs, 2015. "Urbanization and property rights," Policy Research Working Paper Series 7486, The World Bank.
    9. Diao, Xinshen & Cossar, Frances & Houssou, Nazaire & Kolavalli, Shashidhara, 2014. "Mechanization in Ghana: Emerging demand, and the search for alternative supply models," Food Policy, Elsevier, vol. 48(C), pages 168-181.
    10. Suttie, D. & Vargas-Lundius, R., 2016. "IFAD RESEARCH SERIES 2 - Migration and transformative pathways: a rural perspective," IFAD Research Series 280036, International Fund for Agricultural Development (IFAD).
    11. Sanghamitra Bandyopadhyay & Elliott Green, 2018. "Urbanization and mortality decline," Journal of Regional Science, Wiley Blackwell, vol. 58(2), pages 483-503, March.
    12. Ketels Christian, 2017. "Working Paper 258 - Structural Transformation: A competitiveness-based view," Working Paper Series 2369, African Development Bank.
    13. Abbas, Syed Ali & Selvanathan, Saroja & Selvanathan, Eliyathamby A., 2023. "Structural transformation, urbanization, and remittances in developing countries: A panel VAR analysis," Economic Analysis and Policy, Elsevier, vol. 79(C), pages 55-69.
    14. Diao, Xinshen & Fang, Peixun & Magalhaes, Eduardo & Pahl, Stefan & Silver, Jed, 2017. "Cities and rural transformation: A spatial analysis of rural youth livelihoods in Ghana," IFPRI discussion papers 1599, International Food Policy Research Institute (IFPRI).
    15. Headey, Derek D. & Jayne, T.S., 2014. "Adaptation to land constraints: Is Africa different?," Food Policy, Elsevier, vol. 48(C), pages 18-33.
    16. Normaz Wana Ismail & Sudha Sivadas & Rusmawati Said & Azmawani Abd Rahman, 2021. "Urban child health: does parent characteristics matter?," International Journal of Economic Policy Studies, Springer, vol. 15(2), pages 349-365, September.
    17. World Bank Group, 2015. "Rising through Cities in Ghana," World Bank Publications - Reports 22020, The World Bank Group.

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