CASE STUDY ANALYSIS
Rural-Urban Migration and Urbanization in
Developing Countries: India and Botswana
I. Facts of the Case
India
 In 1950, Delhi was not even among the world’s 30 largest cities, but by 2013 its
population had soared to become second in size only to Tokyo.
 Banerjee found that only 14% of his informal-sector sample worked in nonwage
employment. Interestingly, average monthly incomes of nonwage workers were 47%
higher than those of formal-sector workers.
 Banerjee found that mobility from the informal to the formal sector was low: There
was little evidence that more than a very small minority of informal-sector workers
were actively seeking jobs in the formal sectors, and only 5% to 15% of rural
migrants in the informal sector had moved over to the formal sector in a year’s time.
 The rate of entrance into the formal sector from the informal sector was just onesixth to one-third that of the rate of direct entry into the urban formal sector from
outside the area.
 The average informal-sector worker had worked 1.67 jobs over a period of 61
months in the city, while formal-sector workers averaged 1.24 jobs over an urban
career of 67 months.
 The duration of unemployment following migration is usually very short. Within one
week, 64% of new arrivals had found employment, and although a few were
unemployed for a long period, the average waiting time to obtain a first job was just
17 days.
 In a separate study, A. S. Oberai, Pradhan Prasad, and M. G. Sardana examined the
determinants of migration in three states in India—Bihar, Kerala, and Uttar Pradesh.
Their findings were consistent with the ideas that migrants often have a history of
chronic underemployment before they migrate, migrate only as a measure of
desperation, and have the expectation of participating in the informal urban sector
even in the long run.
 Todaro models and may apply to some of Banerjee’s findings. In his view, a family
will send members to different areas as a “portfolio diversification” strategy, to
reduce the risk that the family will have no income. This approach is useful to
explain any observed migration from higher to lower-wage areas and into higherwage areas but not necessarily the area with the highest expected wage. The basic
idea of the Todaro models still applies, but this approach looks at families rather
than individuals and stresses risk aversion