We’ve looked at gross domestic product per person as a, pretty good summary measure of how to categorize countries in, economic development. But that’s an average for countries. Countries have great variation within them and it’s very important, especially in view of our commitment to social inclusion, to broad-based prosperity to understand the variation and the inequalities within countries. Perhaps the starkest kind of variation within countries is the difference of rural and urban life.
In almost every country in the world with just a few exceptions parts of the population live in. Rural areas, other parts live in urban areas and often their lives are very different. And, since many countries are in a transition, moving from rural to urban life, it’s quite important for us to understand the differences of the rural and urban living.
What it means in terms of well being. Income levels kinds of activities. The starting point for us is that, before the industrial revolution, before the era of modern economic growth, virtually the entire world lived in rural areas. Perhaps 90%. Even more of the world’s population were small holder farmers or peasant farmers eking out an existence by trying to grow enough food for themselves, their families and perhaps for the marketplace each year. And we know that when we think about that era, we could think about bucolic. England we see it in the great masterpieces of the 16th and 17th century landscape painters, but we can think about the countryside as characterizing if, almost all of the country. And that kind of rural scene.
Is still very familiar in many parts of the world. In Africa as, in this village site in Malawi and of course in many rural areas of small holder farmers. Rice patty farmers all through Asia. But more and more, the world looks like this. Whether it’s the huge crowds of Seoul, South Korea New York City skyline, the bustling crowds in Beijing. The world is becoming more and more urbanized, and this is changing lives in fundamental ways. It also leading is leading to vast differences. And big inequalities within countries as well. What do we mean by urban?
You’ll be surprised to know, there is no official definition of what it means to be an urban area. Generally, the United Nations, which keeps the books on the proportion of the world that’s rural and the proportion of the world that is urban.
Relies on national definitions which differ across countries. Generally speaking, an urban area is a place where a few thousand people live in a relative, densely settled area. Of course, up to millions of people living in a densely settled area. But, that minimum threshold, whether it’s 2,000 people, or 5,000 people that defines what’s urban versus what’s rural depends on each country.
The difference between rural and urban has some pretty basic points to it that are very important for us to remember as we think about the process of economic development. And as we think about the nature of inequality within countries.
First huge differences what people do in rural areas versus what they do in urban areas to earn a living is quite distinct, overwhelmingly people living in rural areas are in farm families generally. These families own some land or work some land, and agriculture is the mainstay of rural areas, whereas industry and services are the mainstays of urban areas. What that means is that as. Countries experience economic development with a rising proportion of the population in urban areas and a shrinking proportion of the population in rural areas.
That also signifies that a rising proportion of the labor force, of the workers, are in industry and services and a declining proportion. Are in agriculture. This is a nearly universal trend as part of the process, of gross domestic product per capita rising, a rising share of the population, working in industry and services as opposed to agriculture.
Generally speaking, though it can vary, rural areas are poorer. Than urban areas. So income per person tends to be higher in urban areas than in rural areas and that’s one of the magnets that is pulling people in migration children of farmers that are moving from the farms to the cities in search of work. And higher incomes.
Generally the location of rural and urban areas differs when you think about it. Urban areas tend to be at the coasts. They tend to be where it’s easier to engage in trade. Whereas rural areas tend to be where it’s propitious to grow food often. In the interior of the country. So, even the balance of rural and urban is also, typically, a balance of interior and coastal orientation of the country.
Of course, population density, very different. It’s low in rural areas, a high land to person ratio. Whereas the land per person in an urban area can be very low, urban areas can be packed with the thousands of people per square kilometer. The quality of public services tends to differ it’s harder to provide electricity, piped water sewerage systems in rural areas where populations are disbursed. Relative to urban areas. This is one of the reasons why income levels tend to be higher in urban areas.
And one other factor that is quite notable is that the fertility rates meaning how many children note woman tends to have on average in this society tends to be higher in the rural areas then in the urban areas. There are many reasons for this, but one is that children are often seen as good economic workers for the farm, where as in an urban area, children are expensive. Children are going to school, not working on a farm, and the result is that often when households move from the rural to urban areas they also choose. To have fewer children.
Now, if you look at the map of the proportions of populations in urban and rural areas, it looks a bit like the map of income per person.
The richer parts of the world tend to be more urban, the poorer parts of the world tend to be more rural. But looking at the map you can notice a few things.
First, the Americas both North and South America, very highly urbanized societies. 70 or 80% of the population. Again tropical Africa still quite rural, perhaps 65 or 70% of the population living in rural areas only. 30%, or so of the population living in urban areas. One thing that is for sure, though, everywhere in the world, urbanization is proceeding rapidly. It’s part of the economic development process, and if you look at the map of the growth rates of the urban areas, that is the. Annual proportionate increase of populations living in urban areas.
It’s actually in Africa where urbanization rates are extraordinarily high. Sometimes urban areas growing 5% per year. How long does it take for an urban area to double? If it’s growing at 5% percent per year. Remember the rule of 70 that I entioned earlier? Divide 70 by 5%. That’s 14. It’s 14 years then for an urban area to double. For a city of 1 million that’s growing at 5% per year to become a city of 2 million.
That’s a pretty short period of time. You can see that the growth rates of the rural areas is extraordinarily high. The worldwide trend, is for urbanization. On net, as the world’s population grows, another billion people by 2025, another 2 billion people. Roughly by 2045, on average that additional 2 billion of world population taking us from 7 to 9 billion will be an extra 2 billion in urban areas.
Because the world’s rural population has probably peaked at this point, it may even be declining in absolute numbers, whereas the world’s urban population is going to continue to soar. And the proportion of the world living in urban areas is going to rise from the current proportion of roughly half and half, 50 %, to perhaps 70% of the world living in urban areas.
By around 2030, you can see that environmental sustainability healthy cities, are going to be a core challenge of sustainable development, and as that process of urbanization takes places. The country side is also transformed. You look at a country like the United States where the rural population is maybe only 10 to 20% and where the farm population is only around 1% of the entire labor force. Farmers are very efficient working huge farms like you can see here in a wheat farm of huge dimensions in the American Midwest, whereas in today’s rural and poor countries you have farmers working very small plots. As the populations move to urban areas. A number of those farms are going to become much bigger more industrial type of farming less of the small holder farms and the peasant farming that has characterized these countries till now. So this is, in short, one of the big divisions within countries, the rural. Urban divide.
The process tends to be in one direction. The arrow is pretty strong from rural to urban in the process of economic development. Along the way, societies are divided. Cultures are divided. A lot of urbanization though is associated with higher incomes, better public services. Better education, declining fertility rates, and that is a pattern that we see in many parts of the low income and the middle income regions of the world.