Urbanization-Migration-Development An Analysis

B.N. Harisha

1.0

Introduction Mobility is the common characteristic of every individual in the world.

Nobody will stand still in one place. Mobility with an intension to settle in the new designated area can be referred to migration. Migration may contribute either positively or negatively to urbanization. Both urbanization and migration, no doubt, cause development. dealt with based on secondary information. 1.1 Urbanization Urbanization is a process in which we observe changes in the overall structure of an area which may be caused mainly due to increasing economic activities followed by population changes and others. People move into cities in search of economic opportunities. Cities are known to be the places where money, services and wealth are centralized. Urbanization occurs naturally from individual and corporate efforts to reduce time and expense in commuting and transportation while improving opportunities for jobs, education, housing and transportation. Living in cities Hence this Paper, in which the issues related with Urbanization, Migration and Development are, briefly,

Paper presented at the Two-Day National Seminar on Urbanization: Problems And Prospects, Osmania University College for Woman, Koti, Hyderabad, 24 th-25th January. 2009. Research Scholar, Dept. of Economics, Kuvempu University, Jnanasahyadri, Shankaraghatta577 451 Shimoga Dt. Karnataka-mail: harishabn@gmail.com

permits individuals and families to take advantage of the opportunities of proximity, diversity and market place competition. 1.2 Population Growth and Urbanization The worlds cities are growing far faster than its population. Urbanization is the dominant demographic trend of the past and present centuries. In 1950, 750 million of the worlds population lived in cities. by, 1996, this had at least tripled, to more than 2.6 billion. The number projected to live in cities by 2050 is current population of the world. During the early stages of industrialization, urbanization occurred as a response to the pull of employment opportunities in cities. More recently, however, the movement is the result of rural push than urban pull. It is a reflection of the lack of opportunity in the country side due to frequent subdivision of natural lands. 1.3 Economics of Geographical Concentration Advantages of urban agglomeration attract individuals towards cities. Individuals as consumers may think that large scale operation of activities in cities are beneficial to them. Further, they may also think such benefits are hardly obtained in rural areas. Thus, the tendency of this nature of the individuals makes them to move into the cities. On the other hand firms also view that there could be locational advantages in urban areas compared to rural ones. Naturally, this results in geographical concentration of living and activities move towards urban areas. Once the urbanization process begins, market forces tend to attract more people and industries into the cities. Industries are attracted because of agglomeration economies found in cities/ urban areas in the form of a large captive home market supplier of both skilled and unskilled labour and the existence of auxiliary industries. To the individuals, the cities offer a wide range of services and generally security and lucrative employment and the 6.5 billion people which will exceed the

like. Thus, the process of urbanization becomes self reinforcing favoring a continued flow of factors and population into the cities. Let us examine as why industries and people continue to concentrate in cities today. We also need to find out why particular firms and individuals select one city to another. In order to understand, these two interrelated issues, it is necessary to know about the returns of benefits obtained by locating activities in an urban area. One of the reasons for this geographical concentration is agglomeration economies. Agglomeration economies may occur when close geographical proximity generates external benefits for the firms and industries involved. Large concentration of people and industries creates marketing economies as well. It leads to a greater degree of self sufficiency and this in turn, increases the potential market for locally based firms and businesses. A large local market can also reduce actual production costs as it enables a higher degree of specialization and introduces the possibility of economies of large scale production. With the establishment of this in a large urban area, a producer is surely assured of a wider market for goods and in turn it will enable the producer to go in for newer and improved technology in production. Geographical concentration of a specific industry in a particular location tends to encourage the establishment of complementary industries. Urban area is a pool of skilled labour and wide job opportunities. Financial and commercial facilities tend to be superior in large cities. Urban concentrations can usually offer a much wider range of facilities such as recreational, social, educational and so on. A rather more dynamic type of agglomeration economy is the greater incentive for firms to innovate further. 1.4 Theory of Inter-Urban Location Why do firms and people prefer to locate in one city rather than another is a question which is to be dealt with.

In general, people attempt to locate so that they maximize their welfare over time. Firms usually consider to prefer locations offering the highest profits or which meet some other commercial objective. Let us consider the simplest location decision when the firm in question produces a product which sells for exactly the same price irrespective of where it is manufactured. Further, assume that the costs of producing this commodity vary from city to city but that there is one particular location where total production costs are minimized. Any entrepreneur aimed at profit maximization will select the location in the cost minimizing city, suppose the intention is not profit maximization, we need to introduce the concept of a space cost curve which, the entrepreneur wishes to maximize his revenue. In traditional economic theory it is assumed that the costs of production vary with output, increasing costs occurring when the cost of each incremental unit of output rises as output rises and decreasing costs when incremental costs fall with expanding output. A space cost curve differs from this traditional concept in so for as output is assumed fixed but the costs of producing it vary with location. Two types of production cost are generally considered important. i. ii. Basic costs, which are independent of location and Location costs, which depend upon the particular city chosen.

It is the location cost which determines the least-cost site. We shall observe the following figures here.

Fig. A.

Fig. B.

Figures showing the space cost curve and inter-urban location Courtesy: K.J. Butten, Urban Economics, (Page 26). Assume that the space cost curve takes V-shape with respect to distance from the national frontiers. This simply means that there is one city where location costs are minimized and, moving away from the city, location costs will begin to rise. The constant price means that the fixed output will be sold for the same amount wherever it is produced but costs of production will vary, as shown in Figure A. The profit maximizing firm will again select the least-cost city, city H as shown in the diagram, because this offers the maximum net revenue. It is also clear that a firm which strives for cost minimization will also prefer city H. It is possible that the highest price will be obtained in the city offering the lowest production costs. Let us, therefore, assume that city F is the one where prices are the highest and the fixed output of the good will be sold for the maximum revenue, moving away from F, prices fall as the national frontier is approached as shown in figure B. In these conditions, the profitmaximizing firm will locate at G, where the divergence between the revenue curve and the space cost curve is the greatest. Cities are becoming both larger and more numerous. For firms there are positive advantages to be enjoyed by locating together, either with firms

of a similar type or with those of a supplementary nature.

Geographical

concentration permits the benefits of agglomeration and scale economies. To the individuals, cities offer a wide range of social and recreational facilities and permit a higher standard of living to be enjoyed. There is clearly a link between the attraction of cities to firms and to individuals. The market and labour supply of a large urban areas benefits firms locating there but the individuals also gain from having a wider range of jobs to choose from and prospect of higher incomes. Whether it is the availability of labour which attracts industry initially, or the opportunity of employment which attracts workers, is something of a Chicken-and-egg problem. 1.5 Migration Now, here, the Paper turns into the issues of migration. Migration from rural to urban areas is considered to be a universal phenomenon aimed at better prospects. The increasing trend of migration into urban settlements, particularly large metropolitan into urban settlements, has been viewed as an important factor responsible for the increasing urban population as well as changes in the size and structure of cities. There are conflicting opinions regarding the effects of migration, migration has distinct positive effects that leads to a shift in active and more resourceful personnel from a backward to a developed areas, from rural to urban areas, leading to higher rates of productivity. This in turn leads to higher growth rates as well as increased incomes of the area in question and the overall economic development of the urban centre. On the contrary, migration aggravates the problems such as dwellings, unemployment, pollution and unhygienic living conditions which in turn affect the quality of life in the city adversely. Indias largest cities / urban areas Rank 1 2 3 4 5 City/Urban area Mumbai Kolkata Delhi Chennai Bangalore Population 1,63,68,000 1,32,17,000 1,27,91,000 64,25,000 56,87,000

6 Hyderabad Source: Census of India 2001.

55,34,000

With the result of increasing concentration of population in urban areas particularly in larger cities, the developing countries experience rapid growth and expansion in size, structure and the composition of urban population. To a certain extent migration of people from one to the other area could be important instrument for achieving economic development. Migration shifts the human resources from the areas where their social marginal products are assumed to be zero or negligible to the place where their marginal products grow rapidly as a result of capital accumulation and technological progress. At the same time, migration is thought to be important process for meeting the required kind of man power demands in different areas and locations. Due to the excessive and surplus nature of population migration as practiced in larger cities leading to high rate of population growth which contributes excessive pressure upon existing facilities of housing, education, medical, water supply, sanitary services and also creating the problem of environmental pollution and unemployment. growing numbers of urban surplus workers. in general. 1.6 The Linkage between Urbanization and Migration In the growth of urbanization the contribution of migration is important in developing and developed countries as well. The urban areas in developing countries have the extent of problems related particularly to the absorption of increasing labour force due to the natural growth as well as due to migration. The growth rate of labour force in urban areas is ranging from 4 to 7 per cent per annum while the employment opportunities average about 2.5 per cent per annum. On the other hand, open unemployment among And also, the rural-urban Consequently, migration of migration appears to be accelerating the level of urban unemployment and labour force from rural to urban areas adversely affects on the resource use

urban labour force is estimated to be 10 to 15 per cent in these countries. Thus, there seems to be a strong relationship between the rate of migration, high level of urban unemployment, wide spread poverty and the unequal distribution of incomes. In India, the contribution of migrants in the population of urban areas particularly in larger size cities is considered to be more than one-half of the contributions of urban natives. Non-availability of employment opportunities and low level of incomes are indicated to be the most important factors related inversely with the increasing propensity to migration, of the rural people to urban areas. Temporary and circular migration is giving way to more permanent settlement. The largest cities are under increasing strain, and residents are encountering increasing difficulties in improving or even maintaining living conditions. The urban transformation is irreversible, but the rural sectors must also be strengthened to balance the developing economy. 1.7 Development benefits of Migration Migration is the result of individual or family decisions. But it is also a part of social process. In economic terms, migration is as much a global phenomenon as trade in commodities or manufactured goods. It is part of a broader pattern, and evidence of changing economic, social and cultural relationships. Migration may evidence of a different kind relationship; the

combination of poverty, rapid population growth and environmental damage is a powerful destabilizing factor driving urban growth and eventually international migration. On the other hand, migration has usually been seen as evidence of a thriving economy. Todays industrial states were built in part by migrant labour, skills and investment. In todays increasingly uncertain conditions, migration may be seen as a threat to the security and well-being of the local work force and society at large. Migration highlights

linkages and interdependencies within countries, with many implications for development agenda, including population programmes and development assistance.

1.8

Conclusion It can now be concluded form the above discussion that urbanization

and migration can not be stopped altogether. check these two processes.

Attempts must be made to

There is no doubt that urbanization and

migration will have significant role in development process. We have been observing adverse effects of these in the form of heavy pressure on the scarce resources. Rural-urban imbalances will definitely be the unwanted Hence, better late than never, result if this process continues for long.

attempts must be made to bring about balanced regional development in the country as a whole in view of increased urbanization and migration. References 1. Alarn, S M and Alikhan F. eds. (1987), Perspective and Urbanisation and Migration: India and USSR, Delhi, Allied Publishers. 2. Bhattacharya P. (1998), The Informal Sector and Rural to Urban Migration: Some Indian Evidence, Economic and Political Weekly, 33(21),pp1255-62. 3. 4. Button, K.J. 1976. Urban Economics. The Macmillan Press Limited. Lakshmi Narasaiah. M. 2007. Urbanization and Human Rights .

Discovery Publishing House, New Delhi- 110002. 5. Lucas, R.E B. (1997), International Migration in Developing Countries, In Rosenzweig and Stark, eds. Handbook of Families and population Economics, North-Holland, Amsterdam.

6.

Mehta, G.S. 1991. Socio-economic Aspects of Migration . Deep and Deep Publications. F-159, Rajouri Garden, New Delhi- 110027.

7.

Taylor, J E and I. Adelman (1996), Village Economies: The Design, Estimation, and use of village wide economic models, Cambridge University Press. *****

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