Artisanal mining and urbanization in Africa

The past three decades have witnessed a dramatic expansion of artisanal and small scale gold mining (ASgM), transforming the economic and spatial opportunities of tens of millions of people. We show how this transformation has shaped urbanization in Sub-Saharan Africa since 1975. Our empirical strategy exploits plausibly exogenous variation in ASgM activity driven by the interaction between international gold-price shocks and local geological suitability for artisanal extraction, and combines it with new continent-wide data on urban population, nighttime lights, and household welfare. Although ASgM is commonly viewed as a rural activity, we find that ASgM exposure significantly accelerates urbanization, accounting for roughly five percent of total urban population growth. This expansion takes the form of extensive, decentralized urbanization: new towns emerge in remote, infrastructure-poor areas, while the growth of pre-existing towns and cities does not accelerate. Both new and existing urban entities exposed to ASgM exhibit lower living standards and limited industrial activity. Overall, ASgM contributes to a fragmented pattern of urbanization without structural transformation.