Abstract
Little research has examined the relationship between rural to urban migration, urbanization, and economic growth in India. While urbanization is a key driver for economic growth in many countries, the rural to urban migration rate in India is low, potentially due to a lowering of the gap between urban-rural health, infrastructure, employment opportunities, and economic conditions. Using panel data models, I investigate the relevant determinants of rural to urban migration at the state level in India from 1991 to 2011. Panel data analysis suggests that higher per capita state income and a lower difference between urban to rural literacy rates encourage rural to urban migration. In this context, I suggest that urban job creation, improved urban infrastructure, and management of urban poverty and income inequality are essential to promoting rural to urban migration in India.
Highlights
Developing countries such as India are going through a transformation from an agriculturebased rural economy to an industry- and services-led urban economy
The econometric model of state-level rural to urban migration takes the following form: yit = β0 + β1Xit + δt + ηi + it where yit is the total number of migrants or percentage of migration from rural to urban areas and Xit is a set of explanatory variables. ηi is the unobserved time-invariant, state-specific effects; δt captures a common deterministic trend; it is a random disturbance assumed to be normal, and identically distributed with E( it) = 0; V ar( it) = σ2 > 0
The state-specific percentage of urban migration is defined as the total number of migrants from the rural areas to urban areas of a particular state with the duration of residency, of less than one year to more than 10 years, divided by the total urban population of that state
Summary
Developing countries such as India are going through a transformation from an agriculturebased rural economy to an industry- and services-led urban economy. Sweden’s urban population was 85.8 percent of the country’s overall population, 75.3 percent in Germany, 63 percent in Ireland, 81 percent in Canada, 90.5 percent in New Zealand, 89.4 percent in the United States, 80.5 percent in Netherlands, and 82.6 percent in Australia as of 2015 (United Nations, 2014). This indicates that India’s urbanization rate is much lower than that of developed countries.
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