Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter.
Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.
Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.
OCR for page 66
o
_ ~ Will slower population
growthfacilitateth~
absorption of workers into
the modern economic sector and
alleviate problems of urban growth?
THE RELATIONSHIP BETWEEN
ECONOMIC DEVELOPMENT AND CITIES
The impact of rapid population growth on the share of the labor force
employed in the modern economic sectors of the developing countries and
the problems of congestion, slums, and inadequate public services associated
with the rapid growth of cities in developing countries are not readily
distinguished. Urban labor markets and city growth interact with one another
and with other markets and are affected by public policy so that the overall
role of population growth cannot be easily determined.
In considering the effect of population grown on labor markets and urban
conditions in developing countries, one might define the overall development
process in terms of three related processes. Perhaps most fundamental is Be
structural transformation of economic activity from agriculture or other primary
production to industry and modern services, including those provided by the
government sector. Because the modern economic sectors are characterized
by higher wages, this shift contributes to per capita income growth, the
second main feature of development. Finally, both rising income levels and
increased public expenditures contribute to access to modern education and
improved heals care, the third main feature of development.
Cities play an important role in all three aspects of Be development process.
Both industrialization and the provision of public service infrastructure in
developing countries have been largely concentrated in major cities, in part
reflecting the economies of scale made possible by urban agglomeration.
66
OCR for page 67
URBAN GROWTH
67
The expansion of relatively high-wage modern sector employment and better
access to health and educational facilities has attracted rural migrants to
cities. While urban-based development provides benefits otherwise unavailable
to many people in developing countries, there are also significant costs.
Accelerating city growth has strained the capacity of the modern sector to
absorb new workers and increased the number of urban poor, contributing
to the slums and urban squalor that are among the most visible problems
associated with poverty.
POPULATION GROWTH, CITY GROWTH,
AND URBANIZATION
Because of their different relationship to the development process, city
growth rates and increases in urbanization must be carefully distinguished.
City growth rates are the percentage change in the absolute number of people
living in a given city or group of cities; increases in urbanization refer to
a growing proportion of a national population living in urban areas. It is
also useful to differentiate between urbanization patterns exhibiting a high
degree of primacy, in which a large proportion of all urban residents live
in the largest city, and more diffuse patterns.
An empirical distinction between increasing urbanization and city growth
is provided by a comparison of the experiences of developing countries
between 1950 and 1975 win that of the now-developed countries between
1875 and 1900. Preston (1979:196) observes that the increase in urbanization
for developing countries from 16.7 to 28.0 percent during the recent period
is quite similar to the increase from 17.0 to 26.1 percent for the earlier 95-
year period. In contrast, cities in developing countries grew at a 4.3 percent
annual rate between 1950 and 1975, nearly tripling the* urban populations
(United Nations, 1980:Table 4) and far exceeding the 2.8 percent average
growth rate of cities in the now-developed countries during Be late nineteenth
century (United Nations, 1980:Table 3~. This city growth directly reflects
population growth rates of 2.3 percent annually for developing countries
over the period (Bureau of the Census, 1983:Table 8), more than double the
1.1 percent rate estimated for the developed countries in the earlier period
(United Nations, 1980:Table 4~.
Indeed, roughly 60 percent of the growth of cities in developing countries
between 1960 and 1970 can be attributed to natural increase (United Nations,
1980:Table 11), and the rate of national population grown appears to be the
single most significant determinant of city growth rates. Controlling for other
factors, a 1 percent increase in a national population grown rate generates
roughly a 1 percent increase in the growth rate of the cities in a country
(United Nations, 1980:Table 19), while national political capitals tend to
OCR for page 68
68
POPUl~lON GROWTH AND ECONOMIC DEVELOPMENT
grow more rapidly than do other cities. Higher city grown rates are also
associated with more rapid increases in per capita GNP. The importance of
national population grown as a determinant of city growth reflects the fact
that broad cultural, social, and economic factors tend to determine fertility
and mortality within both rural and urban areas in a country. The relatively
young age of mral migrants to cities means a greater contribution to natural
increase through more births and fewer deaths. This effect tends to offset the
declines in fertility rates typically associated with urban residence (Stolnitz,
1984), so that urban rates of natural increase (the difference between birth
and death rates) approximate national rates.
In contrast to the relationships between city growth and overall population
growth, cross-national studies consistently suggest that urbanization is primarily
related to He level of economic development as measured by per capita
income or GNP (Chenery and Syrquin, 1975:Table 7~. On the basis of
recent data, Montgomery (1985) finds urbanization to be much more strongly
associated with per capita income than with population growth. The principal
demographic source of increasing urbanization is rural-urban migration.
Although rapid population growth was once thought to be an important
cause of rural-urban migration, with rural poverty due to excess labor supply
providing a"push" to the cities (e.g., Lewis, 1954), rural outmigration now
seems to be less strongly associated with rural population increase than with
changes in agricultural productivity and rates of overall economic growth
(United Nations, 1980:Table 13) and to be related to land tenure systems
win marked inequality in land holdings and landlessness (Standing, 1984~.
In fact, Preston (1979) argues that poverty tends to preclude migration,
which requires resources, while increasing agricultural productivity generates
rural income growth and the means to move. At the same time, expanding
industrial output and employment provides an economic "pull" to major
cities. This pattern is broadly consistent with the historical experience of the
now~eveloped countries, where the large-scale migration from rural areas to
cities occurred in the context of rapid industrial expansion and agricultural
productivity grown.
There is strong empirical support for the notion that rural-urban migration
in developing countries is motivated primarily by economic opportunity
in cities, including both higher wages and access to public services and
educational facilities (Greenwood, 1969, 1971, 1978; Schultz, 1971; Yap,
1977; Todaro, 1980; Rempel, 1981; Mazumdar, 1985~. Recent simulation
studies using models of urbanization by Kelley and Williamson (1984) and
Mnhan ( 19841 incorporate linkages between structural economic change,
~ ~ - - ~ a ~ ~ ~ _ ~ ~ ~ A^- ·~ ~ ; ~ ~
technological growth, and m~gral~on. Anew; Swung it,. Slim act,
urbanization in developing counties reflects the growth of industry and
modern sector services, while population growth has only a small effect.
OCR for page 69
URB~ GROW
69
In summary, the evidence seems to indicate that the rapid growth of cities in
developing countries compared with historical patterns results primarily from
high national rates of population increase, while increases in urbanization,
which have been roughly comparable with historical experience, are due
almost entirely to rural-urban migration in response to economic grown and
access to publicly provided services.
URBANIZATION AND ECONOMIC GROWTH
Urban areas play a strategic role in development. To make He best
use of scarce public sector resources by exploiting economies of scale,
facilities for power generation and water treatment, transportation systems,
and other public infrastructure tend to be located in urban areas (United
Nations, 1980:39~. Access to urban infrastructure confers a cost advantage
to industrial firms locating in those areas, as do the economies of scale
associated with access to larger and more diversified markets for labor
and other input factors, although these economies of scale seem to be
attributable more to the clustering of similar industries than to urban size
itself (Henderson, 1985~.
As industrial output increases, so does the share of relatively high-wage
industrial employment. Saving tends to increase as a result of the consequent
improvement in average income, providing funds for investment in industrial
capital, education (Chenery and Syrquin, 1975:23), and housing stock, the
latter representing about 20 percent of all fixed investment and 37 percent
of construction in developing countries (Linn, 1983:Table 5-3~. As incomes
increase, the composition of domestic demand tends to shift from food to
nonfood goods, including modern health care and housing services, as well
as to manufactured goods, Her stimulating modem sector growth (Chene~y
and Syrquin, 1975:32~. With continued changes in the composition of output
and consumption, the agricultural share of employment declines, and the
share of industry and services increases (Chenery and Syrquin, 1975:48~.
Migration in search of higher wages continues in response to expanding
modern sector employment, accompanied by increasing urban population
densities. In turn, the price of urban land rises Engram, 1980), driving
up the cost of housing, transported food, and other urban living expenses.
This narrows the real rural-urban wage gap, slowing migration and the pace
of urbanization (Kelley and Williamson, 1984~. As development prods,
modern sector economic activity diversifies, and the urban sector diffuses into
an integrated system of cities, each tending toward specialization in some
set of economic activities (Henderson, 1984, 1985~. In this highly stylized
description, urbanization contributes to overall development by attracting
human resources to activities with greater economic returns. The movement
OCR for page 70
70.
POPUl=ION GROWTH AND ECONOMIC DEVELOPMENT
of labor from relatively low-wage rural activity to h~gher-wage industrial and
modem service sectors contributes to higher overall average income levels,
further stimulating economic growth.
Although contemporary urbanization rates in developing countries are
comparable with those in the now-developed countries at the end of the
nineteenth century, the proportion of the nonagricultural labor force engaged
in manufacturing is significantly lower in today's developing countries than in
the* historical counterparts-approximately 40 percent in 1981 (World Bank,
1983b:148) compared with 55 percent in 1900 (Squire, 1981:Table 1~. This
difference raises the question of whether developing countries have been less
successful in absorbing labor supply growth into the modem sector. One
reason cited for the lower proportion of industrial employment in developing
countries relative to the comparable period in the history of the now-developed
countries is the labor-saving bias in the former, in spite of abundant labor
(Todaro and Stilkind, 1981~. Indeed, industrial labor productivity in the
developing countries grew at an annual rate of 4.6 percent in the 1960s,
compared with a 2.0 percent rate for the relevant countries during the last
20 years of the nineteenth century. This productivity difference reflects We
predominance of technology imported or copied from developed countries
(James, 1985) and seems to be especially prominent in counties emphasizing
domestically manufactured import substitutes, which apparently require more
capital-intensive methods Man does export-oriented manufacturing Krueger,
1978).
The relationship between productivity growth and labor absorption in
industry is not simply technological. In developing countries, high-quality
goods for high-income domestic consumers, for export markets, or as inputs to
the* growing modern sectors may entail relatively capital-intensive production
processes. Expanding industrial output to meet demand in these markets might
increase employment enough to offset any decreases in unit labor requirements
due to productivity gains (Squire, 1981:29~. Moreover, the direct effect of
labor-saving technology on industrial employment growth is partly offset by
the indirect effect on employment grown in supply sectors when interindustry
linkages are taken into account, an effect Mat tends to be larger as the
economy-wide level of technology increases (Stem and Lewis, 1980~. Thus,
Mohan (1984) suggests that a shift to more labor-intensive production might
increase modern sector labor absorption, but the quantitative impact probably
would not be large.
Perhaps more relevant to the seemingly slow absorption of labw into
industry in Me developing countries relative to the history of the last century
is the emergence of large government sectors throughout Me world in the
twentieth century. Publicly provided goods and services are very important in
Me developing counties, comprising 26.2 percent of gross domestic product
OCR for page 71
URBAN GRO~IW
71
(GDP) expenditures in 1981, even more than the current 21.7 percent for
developed countries (World Bank, 1983a:Table 3~. Although the service
sector typically exhibits lower wage levels than the industrial sector (Squire,
1981:Table 15), so that the shift from agriculture into services rather than
into manufacturing slows the growth in average urban income, public sector
wages are generally high in developing countries (Squire, 1981:118~. On
the whole, the share of service employment is consistent with the increasing
importance of He service sector in all economies. For example, in the
developed countries, industrial workers accounted for only about 40.2 percent
of nonagricultural employment in 1981 (World Banlc, 1983b:148), roughly
the same as the developing countries.
The broad patterns of structural change that characterize the development
process are closely related to increasing urbanization. The evidence suggests
that, on average, the composition of the urban-based labor force in developing
countries is comparable to that of contemporary developed countries, even
though the adoption of high-productivity technology may have resulted in a
smaller share for industrial employment than historically in the now-developed
countries. Moreover, that technology has made possible rapid GOP growth
and relatively high industrial wages, generating He tax revenues necessary
to expand public services (Chenery and Syrquin, 1975:Tables 4,5,6~.
RAPID POPULATION GROWTH AND LABOR MARKETS
A widely noted characteristic of urban labor markets in developing countries
is some~degree of segmentation. The modern sector generally consists of
physical and human capital-intensive industrial and service activities and
pays relatively high wages, while the 'informal" sector consists of labor-
intensive small manufacturing or service businesses and self-employed workers,
typically requiring fewer skills and paying relatively low wages. According
to Squire (1981:79) a key distinction between the sectors is that the rate
of return to labor in informal activities is determined primarily by supply
and demand conditions, whereas market imperfections tend to limit modem
sector wage flexibility, generating unemployment and supply spillovers to
the informal sector. Perhaps because of these rigidities, rapid population
growth is associated in cross-national results with a slower absorption of
the labor force into industrial and modern sector activities (Oberai, 1978;
Squire, 1981:183; Chenery and Syrquin, 1975:48~.
Squire (1981:109) cites several possible sources of labor market imper-
fections in the modern sector, including wage inflexibility in government
employment and in large-scale production liens, especially those under foreign
control, and a tendency for wage patterns established in Hose segments of
the economy to diffuse throughout the modern sector. He suggests, however,
OCR for page 72
72
POP UNION GROWTH ANT) ECONOMIC DEVELOPMENT
that minimum wage legislation and unions generally tend to exert less impact
in developing countries than in developed countries because of the* limited
scope, although their influence vanes across countnes. Mazumdar (1984,
1985) notes that large-scale production firms may be motivated to pay a
wage premium to encourage worker productivity and ensure stability, given
the relative scarcity of skilled workers and the costs of training. Another
imperfection is discrimination based on race, ethnicity, and sex, which may
also restrict access to high-wage employment (Knight and Sabot, 1982~.
But while Were is evidence of market imperfections, it would be a mistake
to conclude mat supply factors have no impact on modern sector wage
levels. Indeed, there is evidence that, as theory would predict, rapid labor
supply increases result in slower wage grown in manufacturing and in other
nonmanufacturing modern sector activities (Squire, 1981:Table 163.
Given an urban labor market segmented into relatively high- and low-wage
sectors, it may be economically rational for job seekers to accept a period
of unemployment while searching for a high-wage job rawer than work
in the low-wage sector Modal, 1969; Hams and Todaro, 1970; Fields,
1975; lIarTis and Sabot, 19821. Reflecting the relatively rapid expansion of
education in developing countries (Squire, 1981:130), open unemployment
seems to be highest among young, relatively well educated labor market
entrants whose search for modern sector employment is financed by nonlabor
income, typically transfers from family members (Squire, 1981:3~. Although
data limitations mike it difficult to assess Me scope of open unemployment,
the evidence available suggests that rapid labor force growth in developing
countries has not been accompanied by systematic increases in joblessness
(Sabolo, 1975; Gregory, 19803.
In contrast to relatively well-off job seekers able to afford unemployment
during a search for modern sector employment, most low-skilled urban
workers are obliged to accept employment in Me informal sector (Linn,
1983:37~. Since some employment in this sector represents spillover from
modem sector labor markets unable to absorb growth in the urban labor force,
it has been characterized as underemployment or disguised unemployment
(e.g. International Labour Organisation, 1974~. These teens seem to suggest
that informal sector activity contributes little to the development process, but
there is evidence that many of these activities play useful intermediary roles
in modem sector production and distribution (Linn, 1983:40; Montgomery,
1985~. Portes and Benton (1984) argue that contractually hired labor raises
labor costs and reduces flexibility, so Mat direct hiring of casual labor or
subcontracting to small informal sector businesses may represent an efficient
strategy for modern sector firms in construction, light manufacturing, and
commercial distribution. While average wages tend to be lower in Me informal
sector, entrepreneurs may earn incomes comparable to modern sector workers
OCR for page 73
URBAN GROWTH
73
(Squire, 1981:1403, and low wages for less expenenced workers may be offset
by skill acquisition and eventual accession to self-employment (Montgomery,
1985~. In this sense, the interpenetration of informal and modern sector
activities may represent a relatively efficient adaptation to institutional factors,
contributing to overall employment and economic growth.
At the same time, We relatively free play of supply and demand that
characterizes informal sector labor markets means that labor force growth
influences wage levels. Because informal sector output is generally not traded
internationally, paces of output tend to decline with increases in supply
(Squire, 1981:135), so that rapid labor force growth in this sector tends
to depress the wages and incomes of people employed in those activities.
Indeed, Portes and Benton (1984:589) emphasize that low wages in the
informal sector are the prime cause of the income inequality and poverty
of urban populations in developing countries.
Even though rapid labor force grown typically results in lower wages
than would otherwise prevail in urban labor markets, both in the modem and
informal sectors, it is important to note that most urban workers are probably
at least as well off as they might be in rural areas. Recent research suggests
that migrants to cities are often able to increase their incomes relative to rural
levels and, over time, achieve earnings comparable to those of nonmigrant
urban residents (Yap, 1977; Squire, 1981:103; Rempel, 1981:93~; however,
n~ral-urban living cost differences make comparisons difficult. Of course,
die population movement may partly reflect a greater tendency to migrate
among those with education or skills most suited to urban job maricets
or with prior access to job contacts through ldnship or village networks
(Mazumdar, 1985~. Although the return of unsuccessfi~1 migrants to rural
areas may upwardly bias estimates of the economic returns to migration,
Montgomery (1985) concludes Hat most urban migrants gain economically
from their move.
TlIE EFFECT ON LABOR ABSORPTION OF
DISTORTIONS IN OTHER MARKETS
In major urban areas, direct subsidies for food, along win the subsidized
provision of infrastructure and health and education services at prices that
do not reflect Heir costs to He public sector, artificially lower living costs.
By increasing real rural-urban wage differentials beyond what results from
differences in sectoral labor productivity, these subsidies increase migration
to cities (Squire, 1981:107~. If, as a result, urban labor supply increases
more rapidly Han modern sector labor demand, unemployment and spillovers
to the informal sector may result. Excessively subsidized and inappropriate
services may be particularly pronounced in a country's political capital,
OCR for page 74
74
POPULATION GROWTH ANN ECONOMIC DEVELOPMENT
which is often its largest city (Gilbert, 1976). These distortions would be
expected to increase the attractiveness of these cities to migrants, and, in
fact, migration seems to be disproportionately important in We grown of
this class of cities (United Nations, 1985~.
Ceilings on interest rates in developing countries tend to ration credit so
that it is available only to a few favored firms, limiting investment that
would expand the size of the modern sector. In addition, credit rationing
tends to rule out investment by smaller, more labor-intensive enterprises,
which would tend to increase informal sector wages (Squire, 1981:166~.
Trade policies, including exchange-rate distortions and systems of taxes,
subsidies, and quotas favoring some industrial sectors, may have an impact
on labor absorption. For example, Chenery and Syrquin (1975:64,116)
distinguish two basic trade strategies: import substitution and export-oriented
manufacturing. Large developing countries with significant primary resources
have typically followed the former strategy, using overvalued exchange rates
and taxes on primary exports to subsidize imported capital goods, with
quotas or protective tariffs on imported goods that are also manufactured
domestically. The effect of such policies is to turn the terms of trade against
agriculture, reduce rural output, and increase rural-urban wage differentials,
urban migration, and the pace of urbanization (Squire, 1981:153; Todaro
and StiLkind, 1981:11~. The most significant of these policies is probably
exchange-rate distortions (Montgomery, 1985~.
At least in partial contrast, some smaller developing countries without
important primary resources have followed more e~cport-oriented trade policies
that are based on foreign investment in domestic industry and undervalued
exchange rates that make exports relatively inexpensive in international
markets. An export-oriented trade policy seems to foster not only more
rapid industrial growth (Chenery and Syrquin, 1975:42), but also somewhat
more rapid grown in the high-wage industrial sector and lower overall
unemployment (Squire, 1981:144~. One reason for this outcome may be
that export-onented industries tend to exploit labor cost advantages by using
technology more labor intensively (James, 1985~. In addition, exchange rate
undervaluation tends to keep domestic agricultural prices relatively higher,
reducing rural-urban wage differentials and slowing migration.
URBAN GROWTH, HOUSING, AND PUBLIC SERVICES
Urbanization has provided access to Be benefits of development for an
increasing proportion of He population of developing countries. Linn (1983),
who provides the best data available, notes that because modem sector
economic activity is concentrated in cities, urban residents have access to
higher-wage employment and hence enjoy higher per capita incomes (Linn,
OCR for page 75
URBAN GROWTH
75
1983:Table 1-4) and have a lower incidence of poverty (Linn, 1983:10)
than rural residents. Similarly, reflecting both urban economies of scale in
the provision of public services and higher income levels, city residents
have greater access to electricity (Linn, 1983:Table 1-8), to water supply
and sewage removal (Linn, 1983:Table 1-9), to health services as measured
directly by doctors per person (Linn, 1983:Table 1-14), to hospital beds
(Linn, 1983:Table 1-15), and to education (Linn, 1983:Tables 1-17, 1-18~.
However, averages do not tell the whole story. A significant proportion
of the urban population lives at low income levels in squatter communities
with inadequate access to public services like water, sanitation, education,
and health care. Data assembled by Linn (1983:Table 1-7) suggest Mat the
proportion of urban residents living in squatter settlements is rarely less
than 25 percent and often more than 50 percent, and he argues that living
conditions in these areas are distinctly worse than in nonsquatter areas.
The importance of housing in developing countries is reflected by the
large share it represents of the household budget, averaging between 15
and 25 percent of total expenditures (Linn, 1983:Table 5-2~. Housing needs
include the services derived from the lot and structure, including infrastructure
services such as electricity and water. But as land prices increase, both lot
size and shelter space tend to decrease, and in conjunction with the large
family sizes that are typical of rapidly growing populations, risk of contagious
disease increases. Similarly, since squatter settlements often spread to land
without public infrastructure, access to safe water and sanitary facilities
is limited, also increasing the risk of disease (L;nn, 1983:194~. Because
squatter settlements represent unplanned urban expansion and the provision
of public transportation tends to favor authorized, primarily middle-class
neighborhoods, access by the poor to health and educational facilities and
to employment opportunities is limited. By constraining the ability of the
poor to improve their own or their children's stock of human capital, low-
quality housing in squatter settlements tends to perpetuate We cycle of urban
poverty, effects that may be most severe in the most rapidly growing cities
(Linn, 1983:134).
Urban transportation systems, especially road networks, play an important
role in economic grown by providing producers and consumers win access
to markets, as well as by providing Me labor force with access to workplaces.
The cost of urban transportation tends to increase with city size because of
the increasing costs of land (Linn, 1983:99), so that the public provision of
roads tends to lag behind urban population growth. Consequently, congestion
increases, increasing trip times and transportation costs (Linn, l983:90~.
This increase may disprop~onately affect informal sector activities such as
small-scale wading and carnage. Moreover, as congestion increases, pollution
from motorized transportation also tends to increase (Linn, 1983:98~.
OCR for page 76
76
POPUl~lON GROWTH AND ECONOMIC DEVELOPMENT
Again, not all urban problems in developing countries should be attributed
to rapid population grown. Fragmented financial markets and interest-rate
ceilings Cat ration credit in favor of high-income borrowers tend to limit the
supply of housing, directly contributing to the grown of squatter settlements
(Linn, 1983:133; Renaud, 19821. Rent control laws and inflexible zoning
and subdivision regulations also tend to restrict the supply of housing, and,
when nonresidential land is invaded by squatters, risk of eviction limits the
quality of shelter constructed (Linn, 1983:1671. Moreover, publicly funded
housing and health care projects are often modeled after relatively high-
cost prototypes in developing countries, effectively baking the low-income
majority from access (Linn, 1983:138~.
CONCLUSIONS
Lois review emphasizes the distinction between increasing urbanization
and population growth to simplify the complex relationships between these
demographic processes, labor markets, and the benefits and costs of large
cities in developing countries. Urbanization, produced primarily by rural-urban
migration, plays an important beneficial role in the development process,
providing an increasing share of We population with access to relatively
high-wage employment, education, heals care, and other modern public
services.
But rapid urbanization, resulting from both natural population increases
and rural-urban migration, may cause social adjustment and congestion costs
that are not fully taken into consideration by the potential migrant, and thus
migration may be excessive from a social viewpoint. The most obvious and
pervasive reasons for excessive urbanization, in contrast to the redeployment
of labor and capital to efficient opportunities for growth in urban areas, are
the many distributive effects of the public sector. Taxes, trade restrictions,
and subsidies tend to favor urban residents, and the provision of health,
education, and housing services are markedly skewed toward residents in
urban areas in most developing countries.
The documentation of the social adjustment costs imposed on economies
by rapid rates of urban population grown has proved empirically difficult.
Gregory (1980) could find little evidence that urban unemployment had
increased in the 1970s as the postwar acceleration in population grown led
to more rapid growth of me urban labor force. Nor has evidence yet been
presented to show how the composition of the labor force has adapted in
recent years to the presumed strains of absorbing many new urban labor
force entrants. Documentation is also lacking for presumed diseconomies
of scale in service provision and health conditions for very large cities.
Even Cough population grown has undoubtedly exacerbated some urban
OCR for page 77
URBAN GROWTH
77
problems, stained providers of subsidized services, and possibly slowed the
growth of He share of workers who are in the modern wage sector, slower
population growth will probably not, by itself, solve these problems. A
first step toward slowing excessive urban growth would involve reducing
the public sector's disproportionate subsidies for urban residents and urban-
based economic activities.
Representative terms from entire chapter:
labor force
