Jedwab, R. and Vollrath, D. Urbanization without Growth in Historical Perspective. Working Papers from The George Washington University, Institute for International Economic Policy.
The world is becoming more and more urbanized at every income level, and there has been a dramatic increase in the number of mega-cities in the developing world. This has led scholars to believe that development and urbanization are not always correlated, either across space or over time. In this paper, we use historical data at both the country level and city level over the five centuries between 1500-2010 to revisit the topic of “urbanization without growth” (Fay & Opal, 2000). In particular, we first establish that, although urbanization and income remain highly correlated within any given year, urbanization is 25-30 percentage points higher in 2010 than in 1500 at every level of income per capita. Second, while historically this shift in urbanization rates was more noticeable at the upper tail of the income distribution, i.e. for richer countries, it is now particularly visible at the lower tail, i.e. for poorer countries. Third, these patterns suggest that different factors may have explained the shift in different periods of time. We use the discussion of these factors as an opportunity to provide a survey of the literature and summarize our knowledge of what drives the urbanization process over time.