Migration and Economic Development Nexus: Lessons and Opportunities for Private Sector Jobs Creation in Africa

Document Type

Presentation

Presentation Date

July 2013

Abstract or Description

Paper presented during the Fourth Annual Conference for Regional Integration in Africa (ACRIA 4).According to United Nations (2010) estimates, the world became more urban than rural in 2008 for the first time in human history. The study projected that world population will exceed 9 billion people by 2050. Most studies also document increasing population trends in Africa; especially in burgeoning mega-cities. The latter observation presents additional economic development challenges for Africa.The paper focuses on one of the most complex and nuanced dilemmas of the economic development process facing many developing countries: the phenomenon of unprecedented movements of people from the rural sector to urban centers, the emergence of urban informal sub-sectors, and the lessons learned from cases in the development literature in fostering jobs creation strategies. What are the constraints to job creation and how to mitigate such constraints? What are the private sector contributions to jobs creation and poverty alleviation, in particular?The paper presents the theoretical model of rural-urban labor transfer in the context of urban unemployment. The basic assumption is that whenever rural-urban migration exceeds rates of urban jobs creation, it surpasses the absorption capacity of both industry and urban social services. Applying the Todaro migration model, the paper takes the position that rural-urban migration is an economically rational process even in the face of high urban unemployment or underemployment. The paper also presents a schematic framework showing how various factors interact in influencing rural-urban migration decision by expanding on the original work by Byerlee (1974). Despite being individually rational, extensive rural-urban migration generates social and economic costs for crowded urban centers (cities) especially in the informal sector, while excessive migration also imposes external costs on the rural areas emptied of better-educated, more venturesome young people as well as external costs on urban infrastructure and lost output. However, it appears that many African governments are unprepared or are unable to deal with these challenges.Deriving implications from the Todaro migration model and confronting it with observed data on African rural-urban migration patterns, the paper draws lessons and conclusions, and offers recommended policies in resolving increasing unemployment in the urban sector in particular. A major opportunity in Africa is focusing on the role of the emerging private sector in contributing to jobs creation to help alleviate these problems. Care is taken in drawing up potential complementary regional policies that would not exacerbate historical migration trends by necessarily creating serious imbalances in economic opportunities between urban and rural areas.

Sponsorship/Conference/Institution

Fourth Annual Conference for Regional Integration in Africa (ACRIA 4)

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