ATTENDANCE

QUESTION

If you can live in

any other city,
where will it be?
WARNING: DISCLAIMER
This presentation is for educational purposes only, and
constitute as summary guide of the Professor for
discussions during class. You are not allowed to copy,
distribute and share this to any students outside of class
without prior permission from me. Violation of this will
result in automatic grade of 5.0.

Prof. Cherrie Nuez

DEVELOPMENT ECONOMICS

Lecture #8: Employment, Migration

and Urbanization

Prof.
3 Cherrie Nuez
4
Employment and Development

Population and the labor force are intertwined. Labor skills are a
major component of population quality.

Productive employment is key to growth and poverty alleviation.

Empirical studies highlight that economic growth tends to be
positively associated with job creation.

While economic growth is good for job creation, it is important

that growth occurs in sectors that have the potential to absorb
labour at a large scale. Some sectors and activities are more
employment-intensive than others.

Economic growth is usually accompanied by a decline in the

proportion of labor force in agriculture and an increase in the share
of labor in the more productive industrial and services sector.

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The Production Function
Y = f (L, K, N, E, T)
means that output (or national product) (Y) during a given time period depends on factors such as:

labor (L) eg. Human resources

capital (K) eg. plant, equipment, machinery, buildings,
and inventories
natural resources (N) eg., land
entrepreneurship (E) eg. production resource that
coordinates labor, capital, natural resources &technology
technology (T) eg. technical knowledge,
connotes the practical arts, ranging from agriculture
through manufacturing, communication, medicine,
and electronics.

Source: E.Wayne Nafziger Development Economics

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 Basic Terminologies

Civilian noninstitutional population those age 16 and older is the

base population group which excludes the
(1) active military personel, (2) people confined to, or living in,
institutions or facilities such as prisons, jails, and other -
correctional institutions and detention centers, residential care 45mm"n
facilities such as retirement homes.

Civilian labor force, or labor force includes all people age 16 and
older who are classified as either employed and unemployed, as
defined below. Conceptually, the labor force level is the number of
people who are either working or actively looking for work.

Labor Force Participation: represents the number of people in

the labor force as a percentage of the civilian noninstitutional
population. In other words, the participation rate is the
percentage of the population that is either working or actively
looking for work. The labor force participation rate is calculated as:
(Labor Force ÷ Civilian Noninstitutional Population) x 100.
Unemployment vs. Underemployment
Unemployed: refer to those in the labor
force without work but available and
seeking employment.
Underemployed: those who work less
than they would like to work.
• Visible underemployment occurs
when workers who are compelled to
work short hours as an alternative to
being out of a job.
• Invisible underemployment results
from an inadequate use of workers’
capacities.
Edgar O. Edwards (1974:10–11) identifies three forms of labor
underutilization or underemployment:
1. Disguised underemployment. Many people seem occupied on farms or
employed in government on a full-time basis even though the services
they render may actually require much less than full time. Social
pressures on private industry also may result in disguised
unemployment.
2. Hidden undereployment. Those who are engaged in non-employment
activities, especially education and household chores, as a “second
choice,” primarily because job opportunities are not (a) available at the
levels of education already attained; or (b) open to women, as a result
of discrimination. Thus educational institutions and households become
“employers of last resort.” Moreover, many students may be among the
less able. They cannot compete successfully for jobs, so they go to
school.
3. The prematurely retired. This phenomenon is especially apparent in the
civil service. In many LDCs, retirement age is falling as longevity
increases.
Philippine Labor
Market

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 TYPES OF UNEMPLOYMENT
Causes of unemployment
1. Cyclical unemployment: unemployment directly due to cycles of
economic upturn and downturn.

2. Frictional unemployment: unemployment caused by the time

people take to move between jobs, e.g. graduates or people
changing jobs. There will always be some frictional
unemployment in an economy because the information isn’t
perfect and it takes time to find.

3. Structural Unemployment: This occurs due to a mismatch of skills

in the labour market it can be caused by:
• Occupational immobilities: refers to the difficulties in learning
new skills applicable to a new industry, and technological change,
e.g. an unemployed farmer may struggle to find work in high tech
industries.
• Geographical immobilities: refers to the difficulty in moving
regions to get a job, e.g. there may be jobs in city, but it could be
difficult to find suitable accommodation or schooling
• Technological change: if there is the development of labour-saving
technology in some industries, then there will be a fall in demand
for some types of labour which have been replaced by machines.
• Structural change in the economy. The decline of the coal mines
due to a lack of competitiveness meant that many coal miners
10 were unemployed. However, they found it difficult to get jobs in
new industries such as computers.
Unemployment Problems in LDCs

• Unemployment in urban areas is

twice that of rural areas.
• Most unemployed are first-time
entrants to the labor force (usually
15-24 educated urban population -
especially in LDC in South America
and South Asia)
• Unemployment is higher among
women.

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The Unemployment problem:
Labor Force Growth & Urbanization

Empirical studies show that growing unemployment in

LDCs is caused by the labor force growing faster than
job opportunities.

From 1950 to 2001, the LDC labor force increased

fivefold – from 500 million in 1950 to 2,517 million
(World Bank 1979i:48; World Bank 2003c:44).

Today’s developing countries must contend with a

much more rapid labor force growth than the
industrialized countries had at a similar stage in their
growth.

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Rural-urban migration
1. Lewis model
• states that LDC economic growth
originated from the increase in the
industrial sector relative to the
subsistence agricultural sector.

• Arthur Lewis elaborates on this

theory in his explanation of labor
transfer from agriculture to
industry in a newly industrializing
country.

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Rural-urban migration

2. Harris-Todaro model
• The Harris-Todaro model was created
to explain how internal migration
occurs from rural to urban sectors
through the difference in
the expected wage.

• The model assumes that people only

move for monetary gains, when in
reality there are many other factors
involved in this decision.

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Urbanization

Urbanization
agglomeration
process through
which cities
grow, and higher
percentages of
the population
come to live in
the cities.

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Urbanization
Urbanization could take place in 3 ways:
1. Demographic process: Urban population growth
(natural increase or migration).
2. Infrastructure process: Expansion of urban
infrastructures and land use.
3. Economic process: Creation of secondary, tertiary and
quaternary sectors.

Urbanization creates a society where values and lifestyles are

urban. Urban population growth is the most important change
in population geography.

About 50% of the global population or around 4 billion, lives in

cities.
It is predicted that by 2050, 6.2 billion people will live in cities,
more than the current (2000) population.
Much of this growth will come in the world’s poorest countries.
Urbanization
Causes of urbanization
1. Historical: Defense, Trade routes.
2. Social:
• Increased social interactions
• Institutions representing a society
(government, religion & education).

3. Economic:
• Linked with agricultural surpluses.
• Increased economic opportunities.
• Access to labor.
• Specialization.
• Economies of scale and of agglomeration.

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Urbanization
Population density is a key geographical term and a measurement of
population per unit area. For example, it is commonly expressed as the
number of persons per square mile or persons per square kilometer.

The world’s population density is about 14.7 people per square

kilometer or 38 people per square mile (7.5 billion people divided by
510 million square kilometers or 197 million square miles. This
includes land and water area.

Cities are the most densely populated areas in the world. Those cities
with very high population densities are considered to be
overpopulated and are at risk of facing a lack of quality housing (or
housing in general) and infrastructure and access to resources. High
population density areas also face high traffic volume, escalated rent
prices, and an overall lack of adequate space.

Many of the world’s most densely populated cities are located

in Asia (mostly Southeast Asia). The city population depends on what
definition of “urban area” is used as this typically varies between
countries. Densities are typically higher when only city centers are
used than when suburban areas are included (an agglomeration or
metropolitan area). Source: https://worldpopulationreview.com/world-city-rankings/population-density-by-city
https://www.titlemax.com/discovery-center/the-ultimate-road-trip/the-25-cities-with-the-highest-
population-density-in-the-world/
Urbanization

Crowded Tokyo Street. With more than 40 million residents, Tokyo,

Japan, is a megacity. Another effect of urbanization is urban sprawl.
PHOTOGRAPH BY POLA DAMONTE VIA GETTY IMAGES

https://education.nationalgeographic.org/resource/urbanization/

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Urban Sprawl
Urban Sprawl is the rapid expansion of the geographic
extent of cities and towns, often characterized by low-
density residential housing, single-use zoning, and
increased reliance on the private vehicles for
transportation.

Urban sprawl is caused in part by the need to

accommodate a rising urban population. However, in
many metropolitan areas, it results from a desire for
increased living space and other residential amenities.

Urban sprawl has been correlated with

increased energy use, pollution, and traffic congestion
and a decline in community distinctiveness and
cohesiveness. In addition, by increasing the physical
and environmental “footprints” of metropolitan areas,
the phenomenon leads to the destruction of
wildlife habitat and to the fragmentation of remaining
natural areas. 20
Impacts of Urbanization

21
Impacts of Urbanization

22
Impacts of Urbanization

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Migration
• Within one country. Types of Migration
• Crossing domestic jurisdictional
boundaries.
• Movements between states or
provinces.
• Little government control.
• Factors:
Employment-based.
Retirement-based.
Education-based.
Civil conflicts (internally displaced
population).

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Migration

It is often believe (political right) migrants consume

benefits and resources that are meant to meet
their needs. This leads to excluding the migrants
from urban infrastructure and services such as
health, housing and environment. This process of
alienation can result in the formation of segregated
community clusters, which over time may become
breeding grounds for the radicalization of migrants,
xenophobic violence and leading hate crimes which
makes it difficult for the new group of communities
to enter and survive in the city.

On the other side of the coin, if urban planning &

designing is integrated, different results can be
possible.According to a Bush Institute study notes,
job opportunities, affordable housing, family
connections and immigrant-friendly policies are
among the factors that immigrants consider when
deciding where to move.
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Case Study: International Migration Philippines
Philippines is among the top 10 countries of origin with the largest diaspora populations
(UN International Migration Report, 2015). OFW remittances account for almost 10% of
GDP

Source: https://unstats.un.org/unsd/demographic-
social/meetings/2017/bangkok--international-migration-
data/Session%203/Session%203%20Philippines.pdf 26
International Migration: A case of Brain Drain
• Refers to the case where countries are losing the most educated segment of their population. It
relates to educationally specific selective migrations.

• Can be both a benefit for the receiving country and a problem to the country of origin.

Impact to Receiving Country Impact to Origin Country

1. Getting highly qualified labor
contributing to the economy right
away.
2. Promotes economic growth in
strategic sectors: science and
technology.
3. Not having to pay education and
health costs. (It costs about
$300,000 to educate an average
American.)
1. Education and health costs not paid back.
2. Losing potential leaders and talent:
• Developing countries lose 15% of their graduates.
• Between 15 and 40% of a graduating class in Canada will
move to the US.
• 50% of Caribbean graduates leave.
3. Long term impact on economic growth
4. Possibility of remittances.
5. Many brain drain migrants have skills which they can’t use at home:
• The resources and technology may not be available there.
• The specific labor market is not big enough.
Reverse Migration Trend
• High costs in developed
countries.
• New opportunities in developing
countries.
• Part of the offshoring process of
many manufacturing and service
activities.
• Qualified personnel coming back
with skills and connections
Policies to Address Unemployment, Urbanization &
International Migration

• Family planning and reproductive health

programs to reduce population growth
• Improving/ Reforming the educational
system to match with industry needs.
• Reducing urban bias and Increasing rural /
country side economic development
• DCs support economic development and
political stability of LDCs (to prevent
unwanted international migration )
• Transfer technology and business
offshoring.
The migrants and the cities. Photo by ©youthkiawaaz.com

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Now you know.. So what?
• Read, educate yourself about cities and urban development– read
more here

• Shop, eat and drink locally. Supporting neighbourhood businesses

keeps people employed and circulates money back into your
community.

• Reduce your personal consumption: go vegan, limit flying, share

your household with others, and more

• Commute in a sustainable way – bike, walk or take public transport.

Save the car trips for when you’ve got a big group.

• Support a project in slums for safe housing. You can volunteer in

slums to help with building houses, fixing existing ones, setting up
public or green spaces.

• Take care of public spaces. Start yourself and inspire others to

contribute to better public spaces – water the greenery, trim and
plant trees, renovate sports areas and playgrounds, organize a
cleanup.

• Take advantage of your right to elect the leaders in your local

community. Vote for politicians who acknowledges and work on
issues on migration and urban development.
Source: https://www.globalgoals.org/goals/11-sustainable-cities-and-
communities/#:~:text=Shop%2C%20eat%20and%20drink%20locally,walk%20or%20take%20public%20transport.
FURTHER READINGS AND REFERENCES: Lecture-Themed Movie Lecture-Themed Book
Recommendation Recommendation
Unemployment

Case Study: US –Mexico Migration

Reverse Migration Trend

Case Study: Philippines Immigration Patterns and

OFW stats

DOST Balik Scientist Programme

James Kunstler - How Bad Architecture Wrecked

Cities (TEDTalks)

Watch this:

Urbanized - a documentary by Gary Hustwit Lecture-Themed Song

Megacities: The challenges of Modern Urbanisation

Recommendations
“Take me home, country road”
Brain Drain by John Denver

Eat Bulaga’s Sugod Bahay episodes “Empire State of Mind” by Alicia

Keys 31