Increasing rural-urban divergence in fertility due to poor education levels and low incomes in villages is slowing India’s urbanization

A recently released paper by Chinmay Tumbe, an assistant professor of economics at IIM-Ahmedabad, has shown that state-wise divergence in rural-urban population growth might be the key factor behind difference in pace of urbanization in India.

Tumbe underlines the fact that cities in northern India have been experiencing a faster growth in population than those in the southern parts of the country. Despite this, it is the south which has progressed faster in terms of share of population living in urban areas. The solution to the puzzle lies in the rural-urban differential in natural rate of growth of population in northern and southern India, Tumbe argues. What this means is despite urban population rising faster in the north than the south, the share of urban population in the north has fallen behind that of the south because a much-faster rise in rural population has brought down the share of urban population.

The increasing divergence between rural-urban natural rates of growth of population is because birth rates have come down at a much faster pace in cities than in villages, whereas decline in death rates have become more or less equal.

While the increasing gap has been a pan-Indian phenomenon, its magnitude is much larger in the northern parts of the country, statistics given in the paper show.

Tumbe tests this causation by checking whether or not there is a relation between natural rate of growth and rural literacy and agricultural productivity levels; the two being proxies for education and income. Using an econometric exercise to separate the effect of other factors on natural growth of population, he finds that difference in rural literacy and agricultural productivity account for as much as 26% of the difference in fertility among northern and southern states. This explains the slower pace of urbanisation in northern India in comparison to southern India.