Urbanisation in Post-Apartheid South Africa

April 5 2016

Under apartheid, black South Africans were severely restricted in their choice of location and many were forced to live in homelands. They were free to migrate after apartheid. Given gravity, a town nearer to the homelands can be expected to receive a larger inflow of people than a town further away. We use this exogenous variation to study the effect of migration on urbanisation and the distribution of population. In particular, we test if the inflow of migrants led to displacement, path dependence, or agglomeration in the destination area. We find evidence for path dependence in the aggregate but substantial heterogeneity in town density. Using quantile regressions we show that in areas with high population growth rates migration leads to displacement of incumbents. We also find that in rural areas the exogenous migration shock leads to displacement of incumbents, while in urban areas the causal effect is more consistent with path dependence. Hence an exogenous population shock leads to an increase of the urban relative to the rural population. This finding is consistent with standard models used in economic geography and the migration literature. It suggests that exogenously created migration can drive medium run urbanisation. 

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Chris is a development economist specialising in international migration.

Dr. Ferdinand Rauch is Associate Professor of Economics and Tutorial Fellow at Brasenose College, both at the University of Oxford.  His research interests are in international trade and urban economics.