Agglomeration, pollution, and migration: A substantial link, and policy design

Arbeitspapier

We study a developing countries setting in which agglomeration efficiency of urban production attracts rural-to-urban migration, whereas urban pollution deters rural-to-urban migration. By means of a general equilibrium model we study the formation of policies aimed at striking a socially optimal balance between supporting efficient levels of urban agglomeration and mitigating urban pollution in the presence of endogenous rural-to-urban migration. We show that without government intervention, although rural-to-urban migration contributes to agglomeration economies, it does not improve social welfare because it also exacerbates environmental degradation. We also show that urban pollution problems cannot be resolved by means of environmental regulation alone: for example, an emissions tax aimed at curbing urban pollution can backfire as and when it increases the appeal of rural-to-urban migration. A policy of emissions tax in conjunction with a subsidy to rural individuals is an effective means of enhancing urban productivity while reducing urban pollution.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ZEF Discussion Papers on Development Policy ; No. 321

Classification and Topics

• Classification: Wirtschaft ; Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies ; Geographic Labor Mobility; Immigrant Workers ; Economic Development: Human Resources; Human Development; Income Distribution; Migration ; Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
• Subject: Rural-to-urban migration ; Industrial emissions ; Polluting urban agglomeration ; Environmental regulation ; Policy formation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Stark, Oded ; Pang, Yu ; Fan, Simon Chengze
• Event: Veröffentlichung
• (who): University of Bonn, Center for Development Research (ZEF)
• (where): Bonn
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/268097
• Last update: 10.03.2025, 11:44 AM CET