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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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    File URL: https://economicdynamics.org/meetpapers/2013/paper_344.pdf
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    Cited by:

    1. Adriana Kocornik-Mina & Thomas K.J. McDermott & Guy Michaels & Ferdinand Rauch, 2015. "Flooded cities," GRI Working Papers 221, Grantham Research Institute on Climate Change and the Environment.
    2. Robert Darko Osei & Charles Ackah & George Domfe & Michael Danquah, 2015. "Political settlements, the deals environment and economic growth: The case of Ghana," Brooks World Poverty Institute Working Paper Series esid-053-15, BWPI, The University of Manchester.
    3. Carolina Guevara, 2015. "The effect of trade on agglomeration within regions," Working Papers 1530, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    4. 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.
    5. Tiago Cavalcanti & Daniel Da Mata & Frederik Toscani, 2014. "Winning the Oil Lottery: The Impact of Natural Resource Extraction on Growth," Cambridge Working Papers in Economics 1455, Faculty of Economics, University of Cambridge.
    6. Cai,Yongyang & Selod,Harris & Steinbuks,Jevgenijs, 2015. "Urbanization and property rights," Policy Research Working Paper Series 7486, The World Bank.
    7. Ketels Christian, 2017. "Working Paper 258 - Structural Transformation: A competitiveness-based view," Working Paper Series 2369, African Development Bank.
    8. 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).
    9. Sanghamitra Bandyopadhyay & Elliott Green, 2013. "Urbanization and Mortality Decline," Working Papers 46, Queen Mary, University of London, School of Business and Management, Centre for Globalisation Research.
    10. World Bank Group, 2015. "Rising through Cities in Ghana," World Bank Other Operational Studies 22020, The World Bank.
    11. Headey, Derek, 2015. "The Evolution of Global Farming Land: Facts and Interpretations," 2015 Conference, August 9-14, 2015, Milan, Italy 212027, International Association of Agricultural Economists.
    12. Carolina Guevara, 2015. "The effect of trade on agglomeration within regions," Working Papers halshs-01233389, HAL.

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