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Urbanization and Structural Transformation

Guy Michaels

London School of Economics & Political Science (LSE)

Ferdinand Rauch

University of Vienna - Department of Economics

Stephen J. Redding

Princeton University

October 9, 2008

This paper presents new evidence on urbanization using sub-county data for the United States from 1880-2000 and municipality data for Brazil from 1970-2000. We show that the two central stylized features of population growth for cities - Gibrat's Law and a stable population distribution - are strongly rejected when both rural and urban areas are considered. Population growth exhibits a U-shaped relationship with initial population density, and only becomes uncorrelated with initial population density at the high densities found in predominantly urban areas. We provide evidence that the explanation for these patterns lies in different employment growth dynamics in the agricultural and non-agricultural sectors and the process of structural transformation away from the agricultural sector.

Number of Pages in PDF File: 63

Keywords: Urbanization, Structural Transformation, Gibrat's Law

JEL Classification: R11, R12, E20

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Date posted: October 13, 2008  

Suggested Citation

Michaels, Guy and Rauch, Ferdinand and Redding, Stephen J., Urbanization and Structural Transformation (October 9, 2008). Available at SSRN: http://ssrn.com/abstract=1281691 or http://dx.doi.org/10.2139/ssrn.1281691

Contact Information

Guy Michaels
London School of Economics & Political Science (LSE) ( email )
Houghton Street
London, WC2A 2AE
United Kingdom
Ferdinand Rauch
University of Vienna - Department of Economics ( email )
Vienna, A-1210
Stephen J. Redding (Contact Author)
Princeton University ( email )
Princeton, NJ 08544-1021
United States
HOME PAGE: http://www.princeton.edu/~reddings/
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