URBANIZATION AND RURAL-URBAN MIGRATION: A COMPREHENSIVE ANALYSIS

Introduction
Urbanization is one of the most crucial global processes that alter the contexts of
economy and society in the most profound way. Since population migration shifts from rural
areas to more urban areas, the patterns of mobility, economy, and social organization change.
In this paper, the nature of urbanization as an economic process, policy issue, and structural
change in relation to every country and global trends is explored.

Urbanization: Trends and Living Conditions

Global Urbanization Trends
Global urbanization patterns have recorded an impressive growth over the decades. As
highlighted on the figure 7.1, which compares the growth of urban and rural areas, there was a
dramatic change. This was however at a time when only about 30% of the global population
had transitioned to live in urban centers on average. This percentage had reached 55% by the
year 2018 and according to statistics provided, it is expected that nearly sixty seven percent
of the worlds’ population will be living in cities by the year 2050.

Today, Asia and Africa are key regions that experience such a phenomenon as the
urbanization wave. This is more evident in Philippines where regions including California is
seen to be growing rapidly in terms of planned urban development. Manila, Cebu and Cagayan
de Oro are some of the cities of different developmental processes and difficulties in urban
evolution.

Living Conditions and Urban Challenges

These transitions and particularly the process of rapid population urbanization in the
contemporary world pose a multidimensional interacting mosaic of opportunities and threats.
As cities grow, they also create both significant, potential for economic growth, thus giving
people better opportunities, hence the ladder to middle class life. But this increased
urbanization greatly comes at the cost of infrastructure transformation; in the form of acute
scarcity of housing, clogged traffic jams, and the challenge of sustainably delivering basic
service. These dynamics are relevant with developing countries whose many urban
geographic zones are characterized by sizable informal sectors and unplanned expansive
expansion.
These are complex urban issues that define Metro Manila, home to more than 13 million
inhabitants Public transportation, affordable shelter, and pressure to provide employment
indicate the level of development attained at this metropolitan region. The urban space is
therefore a stage of both the possibilities of human capital and the challenges of systems and
inequality in which agency and structure of an economic liberation meet with the structural
realities of constrained infrastructure and liberation.

Role of Cities
The economic processes regulating the urban context suggest that there are multiple
factors that facilitate development and change. At the core of urban economic progress are
agglomeration economics, which manifest through two critical mechanisms: the two broad
sources of agglomeration economies are identified as urbanization economies and localization
economies. The urbanization economies derive from generalized infrastructure and common
services, while the localization economies involve the deliberate concentration of certain
industries, such as the business process outsourcing industries that have emerged in cities such
as Metro Manila. Urban development models further illuminate these dynamics, with two
primary frameworks emerging: the urban hierarchy model, where the city forms the hub of
the surrounding areas, and the differentiated plane model, where development concentrates
on the transportation interface zones.
The strategic formulation and implementation of policy interventions form the core of
addressing dynamics in urban development. SEZs are one of the best examples of how
governments can effectively exploit their potential, China being a vivid example of how it has
turned villages like Shenzhen into economic powerhouses. Large-scale infrastructure
investment projects like the Philippines ‘Build, Build, Build’ tackle issues of sustainable urban
development, while specific skill development initiatives seek to address employment
problems through consistent skill development in anticipation of real economic development.
Meanwhile, a more complex comparison of urban typography allows identifying different
kinds of urban progress. Many so-called development-leading cities, such as Cebu, boast well-
developed infrastructure, access to highly qualified labor, and high innovation activity. On the
other hand, development-diverting cities like Cagayan de Oro have some issues concerning
investment, a large informal economy, and existing and continuing infrastructure problems.
This typology shows that urban economic development is a profoundly heterogeneous process;
it indicates that generalized models of urban development and growth are likely to provide at
best a simplified snapshot of reality.
Conclusion
These findings indicate that urbanization is a broad phenomenon that involves many
factors that must be interpreted and consequently managed in a more sophisticated manner.
On the one hand, cities create enormous economic benefits; on the other, they are complex
environments requiring systematic planning, effective investments in infrastructure and
revisable policies for the sustainable development of the urban environment. Unique solutions
that will define the role of cities in the future development of society, and the quality of life of
the population, must consider these problems and become oriented on the further rational
utilization of the reserve of expansion of an economic load, to initiate the construction of new
infrastructures and to provide the tendencies of social justice.

“UNDERSTANDING URBAN GIANTS: Causes and Consequences”.

Why Some Cities Become “Urban Giants”?

In many developing countries, the biggest cities became large because they were designed as
main hubs by colonial power, w/c means that colonizers make capital cities or major ports as
their central post/location at the same time, they built transportation networks on the city to
exploit the resources which simultaneously rin is nakakabenefit yung city in the case that
lumalaki siya because of the transportation setup built by the colonizers w/c also lead to
increasing population and improvement of infrastructure nung place.

COLONIAL LEGACY

Colonial legacy influenced city development in several ways:

One is the “hub-and-spoke system” kung saan ang colonizers build transportation routes, with
major cities as central hubs mainly reason dito ng colonizers ay para mapadali ang pag-exploit
nila sa place at gawin ito as their post. Ex. ay sa Kinshasa, sa Democratic Republic of Congo
where it was a small trading post pero nung nacolonize na it grew to a massive city under
Belgian colonial rule.

Most of these colonized are usually located near ports since para mas malapit sila sa ships nila,
the colonizers, and easy transporting of goods and shipping and dun na rin sa place sila nagi-
impose ng urban planning models making the place as the central location.

CONSEQUENCES

 Overcrowding and congestion in major cities – meaning na dumadami ang population sa

place and congestion where too many people in one place at dahil dito nagkakaroon na ng
traffic jam, long lines sa mga restaurants, overcrowded yung train and such.
 Limited growth in smaller cities and rural areas – since focus lng is yung large and urban
cities.
 Difficulty in decentralizing urban development
Nagkakaroon rin ng Agglomeration Economies or Urban Core meaning na nacoconcentrate
yung economic activity, industries, or firms in a specific area, leading to innovation and
productivity, and better access to labor/job opportunity, that’s why maraming tao yung
nagmimigrate sa urban area

Big cities attract businesses and residents due to:

1. Shared resources and infrastructure

2. Access to skilled labor and markets
3. Innovation and entrepreneurship

This agglomeration economies may lead to congestion and may cause some problems like hindi
na makakeep up yung urban core or yung place with all the innovations happening. To avoid
congestion, developed countries tend to improve other cities as another urban core.

Solutions:

1. Satellite city or Edge city – developers create new cities or urban cores within
metropolitan area like 10 to 50 km away sa original urban core to address congestion,
overpopulation at the same time rin is to more efficient resource allocation and
economic growth since hindi na centralized in one city yung economic, social, and
cultural activity ng country
2. Public sector involvement – Gov’ts coordinate new town developments and
infrastructure projects
3. Infrastructure developments – improve links between medium-size cities and upgrade
local infrastructure

FIRST CITY BASIS

 The term first-city bias is a form of urban bias that has often caused considerable
disproportions. It is when a country puts a lot of resources and development into its
biggest city rather than spreading them out across multiple cities.
this results in the largest city becoming more significantly bigger and more economically
powerful than any other city in the country. For example, government may spend more
infrastructure like roads, schools and hospitals sa largest city or it may offer more business
incentives there, which makes companies and people want to move there. Which again lead to
these consequences

 Consequences
 Overcrowding
 Resource strain
 Economic imbalance – w/c means smaller cities don’t get the investment they
need and lead to fewer job opportunities, slower economic growth and lack of
infrastructure.

7.3.2 The Political Economy of Urban Giants

 Causes of Urban Giantism

• Hub-and-Spoke Transportation System
• Location of the Political Capital in the largest city – Gov’t institutions and
resources brings job opp and infrastructure development.
• Rent-sharing and Capital Market failures – like corruption, cronyism or
nepotism w/c hinder regional development
• Import-Substitution Industrialization (ISI) – help promote economic growth and
industrialization and create job opportunities.
• Unstable dictatorships and “bread-and-circuses” effects – it means those in
authority maintain control and power even though may corruption na
nagaganap by providing entertainment and distractions like social welfare or
scholarships to divert attention from the important issues like political issues
and government failures.
• Corruption and lack of democratic rule
 Addressing Urban Giantism
• Promote democracy and reduce corruption
• Invest in infrastructure and export-oriented policies
• Encourage decentralized urban development
• Implement policies to reduce congestion and transportation costs

 Urban Informal Sector

 Informal Sector
The part of the urban economy of developing countries characterized by small, competitive,
individual or family firms, petty retail trade and services, labor-intensive methods, free entry,
and market-determined factor and product prices.

• Nature of the Sector

It consists of unregistered, small businesses providing jobs for those outside formal
employment. (e.g. street vending, small artisans, family-owned businesses, etc.)
• Economic Role
It absorbs labor force, particularly migrants from rural areas.
It proved essential services despite being unregulated.
  It is different from formal sector in way that in formal sector na they are tax compliant,
registered, and regulated whereas informal sector na yung economic activities nila
operate outside the formal often characterized by unregistered businesses, unlicensed
operations, unreported income. But it is important and helpful in a way that it creates
job opportunities and income generation to those people na hindi makahanap ng formal
na trabaho sa urban areas at the same time rin na it contributes to the GDP like from
30% to 40% to some countries.

Ito naman yung cons or challenges ng Urban Informal Sector since walang tax revenue ang
place that would help economic development.

 Challenges for Informal Sector Workers

 Work Conditions
- Lower wages, limited job security, and poor working conditions.

 Living Conditions
- Often live in slums lacking basic services like water, electricity, and sanitation.

 Vulnerability
- High exposure to risks such as extreme weather, environmental hazards, and
economic instability.

The Urban Informal Sector (7.4)

● The informal sector is a significant part of the urban economy in developing countries.
It's characterized by small, competitive, often family-owned businesses that rely on
labor-intensive methods and experience free entry and market-determined prices.
● It provides income opportunities for the poor, especially those who recently migrated
from rural areas and can't find formal employment.
● The sector often lacks job security, decent working conditions, and social security
benefits that are typically found in the formal sector.

Policies for the Urban Informal Sector (7.4.1)

● The informal sector plays a vital role in absorbing surplus labor from rural areas and
supporting the formal urban sector by providing affordable goods and services.
● Policy recommendations for promoting the informal sector include:
○ Facilitating Training: Governments should focus on training programs that align
 with the needs of the urban economy.
○ Enhancing Credit Access: Capital constraints can be addressed by supporting
microfinance institutions and improving access to credit for informal businesses.
○ Improving Infrastructure: Providing basic infrastructure and designated
workspaces can improve the sector's productivity and mitigate negative
environmental and congestion impacts.
○ Ensuring Better Living Conditions: Promoting informal-sector growth in areas
outside of densely populated urban centers can contribute to better living
conditions for workers.

Women in the Informal Sector (7.4.2)

● Women constitute a large proportion of the informal-sector workforce, often due to

limited opportunities in the formal sector.
● Female-headed households, often reliant on informal-sector income, are more
susceptible to poverty, malnutrition, and lack of access to basic services like education
and healthcare.
● Policy interventions to empower women in the informal sector should focus on:
○ Legal Reforms: Governments must repeal laws that hinder women's property
ownership and financial autonomy.
○ Increased Access to Resources: Removing barriers to women's participation in
training programs and extension services is crucial.
○ Provision of Support Services: Affordable childcare and family planning
services can significantly reduce the burden on women and enable greater
economic participation.

Migration and Development (7.5)

● Rural-urban migration, while a natural part of development, can lead to imbalances

when it surpasses urban job creation capacity, contributing to unemployment and
strain on urban infrastructure and services.
● Migration is influenced by various factors, including:
○ Wage differentials: People often move from low-income rural areas to urban
centers with hopes of higher wages.
○ Education: Individuals with higher education levels may migrate to seek better
job opportunities.
○ Social Networks: Information and support from family and friends in urban
areas can influence migration decisions.
○ Economic Shocks: Factors like drought, famine, or lack of opportunities in rural
areas can push individuals to migrate.
An Economic Theory of Rural–Urban Migration (7.6)

● Todaro migration model: A theory that explains rural–urban migration as an

economically rational process despite high urban unemployment. Migrants calculate
(present value of) urban expected income (or its equivalent) and move if this exceeds
average rural income.
● Harris-Todaro model: An equilibrium version of the Todaro migration model that
predicts that expected incomes will be equated across rural and urban sectors when
taking into account informal-sector activities and outright unemployment.

Todaro and Harris-Todaro Models

This report discusses the Todaro and Harris-Todaro Models, which analyze rural-urban
migration and the challenges associated with urbanization. Below is a summarized and
structured explanation:

 Economic Rationality:

People migrate based on a rational evaluation of potential economic gains, weighing

expected income against costs and risks.

 Expected Income:

Migration decisions are influenced by the potential income in cities, even if actual employment
is uncertain.

 Employment Probability:

The likelihood of finding a job in urban areas significantly affects migration decisions.

 Rational Overmigration:

Migration continues as long as urban wages are higher than rural wages, even if urban
unemployment increases.

Urban Wage Dynamics

 Expected Urban Wage:

Calculated as the product of the probability of employment and the average wage.

 Rural-Urban Wage Differential:

The greater the wage gap, the stronger the incentive to migrate.
  Equilibrium Income:

Migration stabilizes when rural and urban expected incomes equalize.

Challenges of Urbanization

 Urban Unemployment:

Excessive migration creates unemployment in cities.

 Urban Congestion:

Overpopulation in cities results in overcrowded housing, pollution, and inadequate

infrastructure.

Policy Recommendations

 Rural Development:

Improve rural infrastructure, education, and job opportunities to reduce migration pressures.

 Balanced Job Creation:

Distribute job creation efforts between urban and rural areas.

 Education-Job Alignment:

Link education expansion with employment opportunities to prevent urban overcrowding.

 Urban Governance:

Deentralize governance to empower local leaders in urban planning and resource allocation.

 Climate Adaptation:

Address climate-induced migration by supporting sustainable rural practices and offering

relocation assistance.

Global Implications

Learning from Other Countries:

Developing nations can adopt sustainable urbanization strategies from global experiences.

Balancing Development:

Governments must balance rural and urban growth to create equitable opportunities