Gold Mining and Proto-Urbanization: Recent Evidence from Ghana

65 Pages Posted: 20 Apr 2016

See all articles by Marcel Fafchamps

Marcel Fafchamps

Stanford University - Freeman Spogli Institute for International Studies

Michael Rene Koelle

University of Oxford

Forhad Shilpi

World Bank - Development Research Group (DECRG)

Date Written: June 30, 2015

Abstract

Central place theory predicts that agglomeration can arise from external shocks. This paper investigates whether gold mining is a catalyst for proto-urbanization in rural Ghana. Using cross-sectional data, the analysis finds that locations within 10 kilometers from gold mines have more night light and proportionally higher employment in industry and services and in the wage sector. Non-farm employment decreases at 20?30 kilometers distance to gold mines. These findings are consistent with agglomeration effects that induce non-farm activities to coalesce in one particular location. This paper finds that, over time, an increase in gold production is associated with more wage employment and apprenticeship, and fewer people employed in private informal enterprises. It also finds that the changes arising from increasing gold production are not reversed when large gold mines shrink. However this pattern cannot be ascribed unambiguously to agglomeration effects, given an increase in informal mining after formal mines decrease output is also observed.

Keywords: Urban Economic Development, Economic Theory & Research, City to City Alliances, Economic Growth, Urban Communities, National Urban Development Policies & Strategies, Urban Economics, Industrial Economics, Regional Urban Development

Suggested Citation

Fafchamps, Marcel and Koelle, Michael Rene and Shilpi, Forhad, Gold Mining and Proto-Urbanization: Recent Evidence from Ghana (June 30, 2015). World Bank Policy Research Working Paper No. 7347. Available at SSRN: https://ssrn.com/abstract=2625335

Marcel Fafchamps (Contact Author)

Stanford University - Freeman Spogli Institute for International Studies ( email )

Stanford, CA 94305
United States

Michael Rene Koelle

University of Oxford

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

Forhad Shilpi

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-458-7476 (Phone)
202-522-1151 (Fax)

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