Urbanization Does Not Necessarily Mean More Wealth

The standard line of thought is that movement to cities correlates with more wealth, but while that works for developing countries in Asia, it doesn't apply to Africa, as these charts from the World Bank's World Development Report show.

The standard line of thought is that movement to cities correlates with more wealth, but while that works for developing countries in Asia, it doesn't apply to Africa, as these charts from the World Bank show. Part of the World Bank's World Development Report on jobs, the chart compares the percentage of population living in urban areas with GDP per capita using data from World Development Indicators.

Urbanization usually leads to higher GDP because of higher levels of productivity, the report says, which is illustrated in the graph to the left. All five of the East Asia and Pacific countries in the graph show a steady increase in GDP per capita as people move to cities. But that did not happen for Sub-Saharan Africa; the graph on the right shows a sporadic relationship between urbanization and GDP. Part of the reason may be because much of non-farm work in Africa is from microenterprises and household businesses that do not earn much. "These businesses make a significant contribution to gross job creation and destruction," the report says, "although not necessarily to net job creation and productivity growth."

Chart by World Bank via World Bank tumblr