Rapid urbanisation, rural-to-urban migration and rural development: Evidence from 8000 Indian towns

Rapid urbanisation and declining rural poverty are central features of many developing countries today, but there is little research on their relationship, especially on the impacts of rapid urbanisation on peri-urban and rural areas close to cities. Rural areas are expected to benefit from urban growth, but it is unclear whether these benefits take place via labour markets, goods markets or rural-to-urban migration. There are many channels through which cities and their hinterlands are connected, but there is little research on the impact of urban growth on the rural hinterland; most of the current research focuses on structural transformation and the effects of agricultural productivity growth on cities rather than the reverse channel.

Identifying mechanisms through which rapid urbanisation can have positive effects on national growth is central to the IGC Cities research agenda. The urban-rural aspect of this problem is important because (i) rural areas are considerably poorer than urban, and there is concern that some are being left behind; and (ii) rural-urban migration is an important factor influencing the structure of rapidly growing cities. The formation of slums is also central to the research question, as slums are often occupied by recent arrivals from the rural hinterland.

We propose to assemble two major new sources of data on urban India to support a study on the causal impacts of urban growth on rural development, rural-to-urban migration, and slum formation. These data sources are the urban Socioeconomic and Caste Census, which contains demographic, asset, income and occupation data for all Indian households, and the 2012 Economic Census, which is an enumeration of every firm in the non-farm sector (including informal and non-manufacturing firms), geocoded at the subtown level.