Urbanization and Inequality/Poverty

Brantley Liddle

doi:10.3390/urbansci1040035

Abstract

The level of world urbanization has crossed the 50% mark, and nearly all future population growth is projected to occur in cities. Cities are disproportionately wealthy, but are associated with poverty, too. Addressing the dual challenges of urbanization and poverty is key to achieving sustainable development. This paper performs cross-sectional regressions, based on Kuznets, as a starting point for understanding the relationship between urbanization and poverty/inequality indicators. Increases in gross domestic product per capita unambiguously lowered poverty and narrowed rural-urban gaps. By contrast, levels of urbanization were either unrelated to poverty/inequality indicators and measures of rural-urban gaps, or had a nonlinear effect where, initially, increases in urbanization likewise led to improvements in those areas, while at higher levels of urbanization, increases in urbanization exacerbated poverty and rural-urban gaps.

Highlights

World urbanization exceeded 50% for the first time in 2009
Less developed regions will account for most of the population growth expected in urban areas
That second point (i) illustrates that cities in developing countries exercise an important migratory pull; and (ii) helps explain that urban areas will be the locus of all UN projected future population growth

Summary

Introduction

World urbanization exceeded 50% for the first time in 2009. According to the United Nations, urban areas will absorb all of the projected 2.5 billion global population growth and continue to draw in some rural population over the 40 years [1]. In Kuznets’ [4] well-known paper, he demonstrated that there is an inverted U-shaped relationship between income inequality and economic growth, i.e., as countries initially get wealthier, inequality increases, but at some sufficiently high level of wealth/development, further increases in wealth correspond to lower levels of inequality. This short communication uses a simple model that is based on Kuznets’ seminal work as a starting point to analyze the impact of urbanization on several measures of both poverty and inequality

Background

Findings

Analysis and Discussion

Conclusions