Module5 Lesson 1.

Measuring Inequality
There are two ways of measuring income inequality: the personal or size distribution of income and
the functional or distributive factor distribution of income (Todaro & Smith, 2015).

1.1. Personal or Size Distribution of Income

The personal or size distribution of income is the measure most commonly used by economists. It
simply deals with individual persons or households and the total incomes they receive. The way in
which they received that income is not considered. What matters is how much each earns irrespective
of whether the income is derived solely from employment or comes also from other sources such as
interest, profits, rents, gifts, or inheritance (Todaro & Smith, 2015).

Moreover, the locational (urban or rural) and occupational sources of the income (e.g., agriculture,
manufacturing, commerce, services) are ignored. If two individuals both receive the same personal
income, they are classified together irrespective even if one may work 15 hours a day as a doctor while
the other doesn’t work at all but simply collects interest on his inheritance. Economists and
statisticians therefore like to arrange all individuals by ascending personal incomes and then divide
the total population into distinct groups, or sizes. A common method is to divide the population into
successive quintiles (fifths) or deciles (tenths) according to ascending income levels and then
determine what proportion of the total national income is received by each income group (Todaro &
Smith, 2015).

1.1.1. Kuznets Ratio (Simon Kuznets) (Todaro & Smith, 2015)

Simon Kuznets, an American Economist and Statistician, introduced the Kuznets ratio, to measure the
degree of inequality between high- and low-income groups in a country.
This illustration indicates that a high national income is not a guarantee of a lesser incidence of poverty
based from personal or size distribution of income. The high income might just be from the
contribution of the few oligarchs, but the greater majority of the low- income earners still belong to
the lower strata.

1.1.2. Lorenz Curve - Max O. Lorenz (Agarwal, 2011)

One of the five major and common macroeconomic goal of most governments is the equitably or fair
distribution of income, which is crucial element of a functioning democratic society. With regard to this
goal, the distribution of income or wealth in an economy is presented by Lorenz Curve.

Note that income and wealth are distinct, one can have a high income but spend it all so that they have
a low level of wealth or a high level of wealth without any income at all. The Lorenz Curve is usually
applied to economic inequality, but technically, it can be used to show the degree of unequal
distribution in any context.

Based on either their income or their wealth, percentiles of the population are plotted on the horizontal
axis (x-axis) of a graph. This is set against cumulative income or wealth, which is plotted on the vertical
axis (y-axis) of that graph. This creates a curved line–that is the Lorenz curve. The further away from
the diagonal, the curve is, the more quantitatively unequal the distribution of income is. For instance,
if the x-value is 20 and the y-value is 10, this signifies that the poorest 20% of the population has 10%
of the overall wealth or income.

The curve shows the proportion of income earned by any given percentage of the population. The line
at the 45º angle (represented in the graph below by the line marked “Perfect Equality”) has a slope of
1 and shows perfectly equal income distribution. Meanwhile, the other line shows the actual
distribution of income (which is marked in the graph below with the label “Actual Income
Distribution”).
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The more bowed out the Lorenz curve–that is, the deeper or more pronounced the curve– the higher
the degree of income inequality in that country’s national economy; meanwhile, a shallow curve that’s
closer to the “Perfect Equality” line indicates a higher level of income equality.
1.1.3. Gini Coefficient - Corrado Gini (Salverda & Checchi, 2015)

It was developed by the Italian statistician and sociologist Corrado Gini and published in his 1912
paper Variability and Mutability (Italian: Variabilità e mutabilità). The Gini coefficient measures the
inequality among values of a frequency distribution (for example, levels of income), and is derived
from Lorenz Curve shown in Figure 5.2. The curve reflects less income inequality, with the curve nearer
to the line of perfect equality.

To understand more clearly how Gini Coefficient works, simply stated: “A country in which every
resident has the same income would have an income Gini coefficient of 0. A country in
which one resident earned all the income, while everyone else earned nothing, would have an income
Gini coefficient of 1.

The same analysis can be applied to wealth distribution (the "wealth Gini coefficient"), but because
wealth is more difficult to measure than income, Gini coefficients usually refer to income and appear
simply as "Gini coefficient" or "Gini index," without specifying that they refer to income. Wealth Gini
coefficients tend to be much higher than those for income.

1.2. Functional or Distributive Factors of Income Distribution (Todaro & Smith, 2015)

The second common measure of income distribution used by economists, the functional or factor share
distribution of income, attempts to explain the share of total national income that each of the factors
of production (land, labor, and capital) receives. Instead of looking at individuals as separate entities,
the theory of functional income distribution inquires into the percentage that labor receives as a whole
and compares this with the percentages of total income distributed in the form of rent, interest, and
profit (i.e., the returns to land and financial and physical capital). Although specific individuals may
receive income from all these sources, that is not a matter of concern for the functional approach.

Under competitive market assumptions, the demand for labor will be determined by labor’s marginal
product (i.e., additional workers will be hired up to the point where the value of their marginal product
equals their real wage). But in accordance with the principle of diminishing marginal products, this
demand for labor will be a declining function of the numbers employed. Such a negatively sloped labor
demand curve is shown by line DL. With a traditional, neoclassical, upward-sloping labor supply curve
SL, the equilibrium wage will be equal to WE and the equilibrium level of employment will be LE. Total
national output (which equals total national income) will be represented by the area ODEQE. This
national income will be distributed in two shares: OWEEQE going to workers in the form of wages and
WEDE remaining as capitalist profits (the return to owners of capital).

Hence, in a competitive market economy with constant-returns-to-scale production functions (a

doubling of all inputs doubles output), factor prices are determined by factor supply and demand
curves, and factor shares always combine to exhaust the total national product. Income is distributed
by function—laborers are paid wages, owners of land receive rents, and capitalists obtain profits. It is
a neat and logical theory in that each and every factor gets paid only in accordance with what it
contributes to national output, no more and no less.

So, we have so far discussed ways to measure income inequality as follows: a) personal or size
distribution of income through Kuznets Ration, Lorenz Curve and Gini Coefficient; and b) Functional
or Distributive Factors of Income Distribution. But the next question is “Why do we have to measure
inequality?”
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Lesson 2. Measurement of Poverty

Now let’s switch our attention from relative income shares of various percentile groups within a given
population to the fundamentally important question of the extent and magnitude of absolute poverty
in developing countries (Supriya, n.d.).

Poverty is a multidimensional concept that seeks to measure levels of deprivation encountered by a

person, household or community. Although most of the literature focuses on indicators of deprivation
such as income, food, access to housing and so on, the choice of indicators to measure levels of
deprivation can often be arbitrary and hence may not reflect a full-scale measure of unmet basic needs
in different social contexts. This discrepancy leads to concepts such as poverty, social exclusion and
vulnerability being used interchangeably in development discourse (Supriya, n.d.).

2.1. Difference Between Absolute and Relative Poverty

Measuring poverty is not an easy task, so it would be more helpful if we discuss first the two basic
types of poverty: the absolute poverty and the relative poverty.

• Absolute Poverty

In absolute sense a person is poor if his income falls below a certain minimum level which is required
to satisfy minimum basic needs. Now the problem faced in measuring poverty is to specify the
minimum basic needs or what is also called minimum living standard (MLS) that should be defined as
poverty line.

It is a condition characterized by extreme scarcity of basic human needs like; food, potable water,
sanitation, health, shelter, education, and information, etc. This condition is the same in every society
and does not change over a period of time. People live in a condition of absolute human misery.

• Relative Poverty

It is the condition in which people lack the minimum amount of income needed in order to maintain
the average standard of living in the society in which they live. Relative poverty is considered the
easiest way to measure the level of poverty in an individual country. Relative poverty is defined relative
to the members of a society and, therefore, differs across countries. People are said to be impoverished
if they cannot keep up with the standard of living as determined by society.

It is a condition when certain households in a nation earn an income that makes them poor in relation
to the higher income households in the same nation. It is subjective to the society in which a person
lives and thus it differs from society to society and changes over a period of time. People regard
themselves poor only in relation to other’s standards of living.

While allowing for variations in indicators of unmet basic needs, poverty is generally considered to be
a measure of deprivation of the basic needs that a person, household or community requires to have a
basic standard of living. Deprivation can be measured either in terms of a lack of resources (eg income,
assets), capabilities (eg skills, knowledge, technology) or both.

2.2. Measuring Poverty (Todaro & Smith, 2015)

2.2.1. Head- Count Index (HCI)

Absolute poverty is sometimes measured by the number, or “headcount,” (H), of those whose incomes
fall below the absolute poverty line, (Yp). When the headcount is taken as a fraction of the total
population, (N), we define the headcount index, H/N (also referred to as the “headcount ratio”). The
poverty line is set at a level that remains constant in real terms so that we can chart our progress on
an absolute level over time. The idea is to set this level at a standard below which we would consider
a person to live in “absolute human misery,” such that the person’s health is in jeopardy 3

One practical strategy for determining a local absolute poverty line is to start by defining an adequate
basket of food, based on nutritional requirements from medical studies of required calories, protein,
and micronutrients. Then, using local household survey data, one
can identify a typical basket of food purchased by households that just barely meet these nutritional
requirements. One then adds other expenditures of this household, such as clothing, shelter, and
medical care, to determine the local absolute poverty line.

Based from the 2019 report of the Philippine Statistics Authority, the poverty threshold of a family of
five (5) is estimated at Php 10,481. This is estimated amount to meet the adequate basket of food, based
on nutritional requirements from medical studies of required calories, protein, and micronutrients.
Then, using local household survey data, one can identify a typical basket of food purchased by
households that just barely meet these nutritional requirements. One then adds other expenditures of
this household, such as clothing, shelter, and medical care, to determine the local absolute poverty line.

2.2.2. Total Poverty Gap

Total poverty gap (TPG) measures the total amount of income necessary to raise everyone who is
below the poverty line up to that line. Figure 5.4 illustrates how we can measure the total poverty gap
as the shaded area between poverty line, PV, and the annual income profile of the population. It is the
ratio showing the average shortfall of the total population from the poverty line —the minimum level
of income required to secure the basic necessities for survival. In other words, it reflects the intensity
of poverty in a nation.

Figure 5.4. Measuring the Total Poverty Gap (Todaro & Smith, 2015)
Even though in both country A and country B, 50% of the population falls below the same poverty line,
the TPG in country A is greater than in country B. Therefore, it will take more of an effort to eliminate
absolute poverty in country A.

2.2.3. Foster-Greer-Thorbecke (FGT) or Severity of Poverty

Another way of measuring poverty is Squaring the poverty gap or can also be called severity of poverty.
It gives an indication of inequality among the population living below the
poverty line, in other words a measure of the severity of deprivation of those living in absolute poverty.
The Foster-Greer-Thorbecke (FGT) index is a generalized poverty measure developed by Erik
Thorbecke, Joel Greer, and James Foster. It considers the inequality among the poor and allows one to
vary the amount of weight on income levels when
calculating poverty in. Severity of poverty (SP) the total of the squared income/expenditure shortfall
(expressed in proportion to the poverty threshold) of families/ individuals with income/expenditure
below the poverty threshold, divided by the total number of families/ individuals.

It is a poverty measure, which is sensitive to the income/ expenditure distribution among the poor –
the worse this distribution is, the more severe poverty is.
2.2.4. Multidimensional Poverty Measurement

Poverty can not be adequately measured by income alone, hence a multidimensional approach is
considered. The Multidimensional Poverty Index (MPI) is an attempt to reconceptualize the
measurement of poverty to acknowledge that, while income is a necessary element, it is by no means
a sufficient gauge of social well-being. Multidimensional poverty measures can be used to create a more
comprehensive picture. They reveal who is poor and how they are poor – the range of different
disadvantages they experience. As well as providing a headline measure of poverty, multidimensional
measures can be broken down to reveal the poverty level in different areas of a country and among
different sub-groups of people.

Most countries around the world define poverty as the lack of money. However, the poor themselves
consider their experience of poverty much more broadly. A person who is poor can suffer multiple
disadvantages at the same time – for example they may have poor health or malnutrition, lack of clean
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water or electricity, poor quality of work or little schooling, or worse lack of education. Focusing on
one factor alone, such as income, is not enough to capture the true reality of poverty.

2.2.5. Why Measure Poverty?

• To keep the poor statistically visible, so that it will be part of the political and economic agenda
of the politicians.
• A good poverty profile can be a platform to attract policymakers in allotting resources for
special projects to address its concerns.
• Results of poverty measurement can be utilized in targeting employment, as there are investors
who prefer to employ workers from the poor areas because they are proven more industrious and
diligent in work.
• To be able to predict the effects of policies and programs designed to help the poor.
To judge the effects, one would ideally like to monitor the effects of a policy on the poor, and evaluate
the outcomes in comparison with a control group. Rigorous analysis of this kind is needed both to
improve the design of projects and programs, and to weed out ones that are not working.

• Information on poverty is also helpful in understanding the politics of many government

policies. By collecting information on households and their economic status, one can assess who uses
public services and who gains from government subsidies. If programs are cut or there is retrenchment
of the public sector, poverty data help inform us of the effects of these plans on the poor. Using
information on poverty, one can simulate the impact of different policies. The identification of the
gainers and losers goes a long way towards determining who will support, or oppose, a given policy.

Import Substitution is an economic policy that aims to reduce a country's dependence on imported goods by promoting the
production of those goods domestically. This strategy is often pursued by developing countries to foster local industries and
achieve self-sufficiency.

Advantages:
-Protection of Domestic Industries: By imposing tariffs and quotas on imports, countries can nurture nascent industries,
providing them with the time needed to develop competitive advantages.
- Tariffs are taxes imposed by one country on goods imported from another country. Tariffs are trade
barriers that raise prices, reduce available quantities of goods and services for US businesses and
consumers, and create an economic burden on foreign exporters.
- Immediate Demand: Import substitution often addresses existing demand for products that are being imported, making it
easier for governments to justify local production.
- Job Creation: By developing local industries, this approach can create jobs and reduce unemployment in the short term.

Disadvantages:
- Higher Costs: Domestic producers, insulated from foreign competition, may not achieve efficiency. This often leads to higher
prices for consumers as local products can be more expensive and of lower quality than imported goods.
- Limited Competition: The lack of foreign competition can hinder innovation and improvements in quality, as domestic firms
may become complacent.
- Retaliation and Trade Restrictions: Other countries may respond to import restrictions with their own tariffs, which can further
complicate trade relationships and harm economic growth.
- Long-term Viability: While import substitution may protect certain industries initially, it can stifle long-term economic growth by
failing to promote specialization and comparative advantage.

-Export Promotion focuses on producing goods primarily for international markets rather than solely for domestic consumption.
This approach emphasizes leveraging a country's comparative advantages to enhance efficiency and competitiveness.

-Comparison to Import Substitution:

- Long-term Benefits:
-Enhanced Efficiency: Export promotion encourages producers to improve efficiency and innovation to compete in global
markets.
- Global Market Access: By focusing on exports, countries can diversify their markets and reduce reliance on domestic demand,
which may be limited. 5
- Economic Growth: Countries that adopt export promotion often experience higher economic growth rates due to increased
trade and investment.

- Potential Challenges:
 - Initial Investment and Infrastructure: Developing the necessary infrastructure for export-oriented industries can require
significant initial investment.
- Global Market Vulnerabilities: Dependence on foreign markets can expose economies to global economic fluctuations and
trade disruptions.
- Balancing Domestic Needs: Countries must ensure that the focus on exports does not neglect the needs of local consumers
and industries.

Overall, export promotion is viewed favorably by economists compared to import substitution, as it encourages a more dynamic
and competitive economic environment.

Foreign Aid plays a crucial role in the economic development of recipient countries, providing resources and support that may
not be available locally. It can take various forms, including:

- Bilateral Aid: Assistance provided directly from one country to another, often tied to specific political or economic goals.
- Multilateral Aid: Funds provided through international organizations like the World Bank or International Monetary Fund (IMF),
pooling resources from multiple donor countries for larger projects.
- Grants and Loans: Aid can include grants that do not need to be repaid or loans with favorable terms (low interest rates and
long repayment periods).

Effects on Recipient Countries:

- Immediate Support: Foreign aid can provide critical financial resources to address urgent needs, such as health care, education,
and infrastructure development.
- Economic Growth: By funding projects that enhance productivity and infrastructure, foreign aid can stimulate economic
development.
- Dependency Issues: However, aid can create dependency, undermining efforts to achieve self-sufficiency. Governments may
rely on aid rather than developing local industries.
- Potential Misallocation: Aid can sometimes be misused or diverted, benefiting government officials rather than the intended
projects or populations.

Ultimately, while foreign aid can facilitate development, it must be managed carefully to ensure it promotes sustainable growth
and self-reliance.

The relationship between international trade and economic growth is complex and multifaceted. Trade openness can provide
numerous benefits, such as access to larger markets, increased competition, and exposure to new technologies. However, the
outcome of trade openness on economic development depends on several factors:

- Comparative Advantage: Countries that trade in areas where they have a comparative advantage are likely to experience
greater economic growth.
- Quality of Institutions: Strong institutions that promote fair trade practices, property rights, and corruption control facilitate
better trade relationships and economic development.
- Infrastructure: Adequate infrastructure (transportation, communication) is crucial for effectively engaging in international trade
and maximizing economic benefits.
- Technological Capability: Countries that can adapt and adopt new technologies from trade are more likely to benefit from trade
openness.
- Market Conditions: The internal market conditions, such as labor market flexibility and demand for goods, also play a significant
role in determining how trade impacts growth.

In summary, while trade openness can lead to economic development, its success hinges on the aforementioned factors working
in concert.

The effectiveness of foreign aid in promoting self-sufficiency in developing countries is a subject of debate. While foreign aid can
provide essential resources and support, its long-term impact often leads to complex outcomes: 6

Effectiveness:
- Initial Benefits: Foreign aid can address immediate needs, improve infrastructure, and provide educational resources, helping
countries lay the groundwork for development.
- Capacity Building: Some aid programs focus on building local capacities and skills, which can enhance self-sufficiency in the long
run.

Challenges:
- Dependency Risks: Continuous reliance on foreign aid can hinder the development of local industries and lead to a cycle of
dependency, making it difficult for countries to achieve sustainable economic growth.
- Corruption and Misallocation: Aid can sometimes be misallocated due to corruption or poor governance, which detracts from
its intended purpose and efficacy.
- Limited Impact on Structural Issues: Foreign aid may not adequately address deeper structural issues within economies, such as
inadequate governance, social inequality, and lack of investment in local capacities.

Implications for Economic Stability:

Dependence on foreign aid can create vulnerabilities, as recipient countries may struggle to cope with economic shocks if aid is
reduced or withdrawn. Long-term economic stability requires developing robust local economies, institutions, and capacities.
Therefore, while foreign aid can play a role in supporting development, it is crucial for countries to implement strategies that
promote self-reliance and reduce dependence on external support.

Urban is problematic to define and no single globally accepted definition of what constitutes an urban settlement exists. What
national statistical offices define as “urban” varies from country to country and often varies over time within countries. Some
countries define urban based on a minimum population threshold and population density, while other countries use an
administrative definition of what constitutes an urban area. Yet others, include more criteria such as proportion of workforce
employed in non-agricultural sectors and availability of infrastructure or of education, health and other services (IOM,
2015 and UN, 2018). Most urban population thresholds fall between one and five thousand inhabitants (IOM, 2015).

Urbanization or “urban transition” refers to “a shift in a population from one that is dispersed across small rural settlements, in
which agriculture is the dominant economic activity, towards one that is concentrated in larger and denser urban settlements
characterized by a dominance of industrial and service activities” (UN, 2018).

Urbanization generally occurs as a result of one or more of the following processes:

 natural population growth;

 when more people move from rural to urban areas;
 when the boundaries of what is considered urban are extended: and/or
 from the creation of new urban centers.

“Very often, urbanization is primarily the result of migration” (IOM, 2015).

Urban population growth is often confused with urbanization but is a distinct concept. Urban growth can take place without any
urbanization if urban and rural areas are both growing at the same rate. Urban growth is the increase in the absolute number of
people living within defined urban areas. It is defined as “the increase in the proportion of the urban population over time as
part of the whole population. Urban growth comes from demographic growth and international and internal migration (IOM,
2015).

Urban-to-urban migration, rural-to-rural migration, rural-to-urban migration, and urban-to-rural migration: These types of
migration refer to the movement of people from one urban or rural area to a different urban or rural area. These types of
migration may happen within a national border or involve crossing an international boundary (IOM Glossary, 2011).

City is also difficult to define because what constitutes an urban settlement varies and there are no standardized international
criteria for determining the city (UN DESA, 2018). Multiple boundary definitions can exist for any given city. In general, there are
three concepts:

 City proper describes a city according to an administrative boundary (ibid.).

 Urban agglomeration considers the extent of the contiguous urban area, or built-up area, to delineate the city’s
boundaries and is therefore bigger than the city proper (ibid.).
 Metropolitan area defines its boundaries according to the degree of economic and social interconnectedness of 7 nearby
areas, identified by interlinked commerce or commuting patterns, for example. Metropolitan areas are bigger than the
city proper, and can be as big as urban agglomeration, but distinct. While both urban agglomerations and
metropolitans can be defined by size, density and contiguity, the definition of metropolitan areas includes other criteria
such as administrative functions, and industries and services available, to name a few (ibid.).
Cities can also be categorized by population thresholds (IOM, 2015, based on UN DESA):

 Small cities have up to 1 million inhabitants

 Medium-sized cities are cities with 1 to 5 million inhabitants
 Large cities are cities with 5 to 10 million inhabitants
 Megacities are cities with 10 million or more inhabitants


Recent trends
Urbanization

A majority and growing proportion of the world’s population is living in urban areas. The share of the world’s population living in
urban areas is expected to increase from 55 per cent in 2018 to 60 per cent in 2030 (UN, 2018). In 1950, 30 per cent of the global
population was living in urban areas (ibid.).

In 2018, Northern America was the most urbanized region in the world, with 82 per cent of its population living in urban areas.
This was followed by Latin America and the Caribbean (81%), Europe (74%) and Oceania (68%) (UN, 2018). The lowest levels of
urbanization are found in Asia (50%) and Africa (43% ), however with large differences among some countries (ibid.).

Most of the world’s fastest growing cities are in Asia and Africa. Between 2018 and 2050, the urban population of Africa is
projected to triple and that of Asia to increase by 61 per cent, so that by 2050 most of the world’s urban population will be
concentrated in Asia (52%) and Africa (21%) (UN, 2018).

Urban population growth has been propelled by the growth of cities of all sizes. In 2018, 33 megacities hosted 13 per cent of the
global urban population (UN, 2018). By 2030, the number of megacities is projected to increase to 41, with 14 per cent of urban
dwellers worldwide residing in megacities (ibid.).

Urbanization and migration

Approximately one in five international migrants are estimated to live in just 20 cities -Beijing, Berlin, Brussels, Buenos Aires,
Chicago, Hong Kong SAR, China, London, Los Angeles, Madrid, Moscow, New York, Paris, Seoul, Shanghai, Singapore, Sydney,
Tokyo, Toronto, Vienna and Washington DC (IOM, 2015)1
. For 18 of these cities, international migrants represented around 20 per cent of the total population (ibid.).

The share of foreign-born persons in the total population in some cities exceeds the global average (around 3.5%) by a large
margin (IOM, 2015). Dubai has an foreign born population of close to 83 per cent, while in Brussels it is 62 per cent, in Toronto 46
per cent, New York 37 per cent, and Melbourne 35 per cent, to name a few examples (ibid.).

Different types of migration play a role in urban growth and diversity, but to different extents. In the developed countries, one of
the main sources of population diversity is international migration, while in the developing countries it is most likely internal
migration (IOM, 2015), in addition to demographic growth through births outnumbering deaths.

In some countries, rural-to-urban migration and reclassification of what is considered urban together accounted for more than
half of the urban growth, such as in China and Thailand (80%), Rwanda (79%), Indonesia (68%) and Namibia (59%) (UN, 2018).
Circular and temporary migration is found in many urban parts of fast-urbanizing Asian and African countries, especially China
and India as well as Ghana and Kenya (ibid.).

Data sources-Data sources on migration exist, as do data sources on urbanization. What is harder to find are reliable,
comparable and comprehensive data sources that combine both migration and urbanization data.

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The general lack of migration data (availability and accessibility) at the urban level, especially for low income countries, perhaps
reflects (1) the long-standing focus on the nation as the unit of analysis in migration research and migration policy and (2) a
general disjuncture between national and local policies on data collection for migration management purposes.

The key data sources that combine both migration and urbanization data are:
Censuses generally capture city-level data on the stock of international migrants every ten years or so; data collected are basic
and aggregated. Censuses may undercount migrant numbers as they usually exclude data on irregular migrants and migrants
living in peri-urban areas or the areas between the suburbs and the country side. Censuses also capture city-level data on
internal migration by recording changes of residence of individuals over a given time.

Population registers also capture city-level data on internal migration and the stock of international migrants. Compared to
censuses, the data captured through population registers are timelier, updated more frequently, and provide more demographic
and socioeconomic information. Like censuses, population registers usually do not capture data on irregular migrants.
Population registers are also found in relatively few countries—usually in the more developed parts of the world.

Surveys can capture city-level data on internal migration and international migration but provide more detailed data on
migrants than censuses and population registers. Demographic and Health Surveys (DHSs), for example, can provide data on
migrant health outcomes and nutrition-related information at the city level. DHSs can also provide data on rural-urban internal
migration, and in a few cases, rural-urban international migration. Furthermore, labour market surveys can provide data on
migrants’ socioeconomic outcomes, making them useful for measuring immigrant integration.

Compared to censuses and population registers, surveys better capture undercounted migrants, such as irregular migrants, and
facilitate identifying groups of migrants, such as women, children, and refugees.

Administrative data sources, such as border statistics, residency permits, and naturalization records can capture city level data
on internal and international migrants, but are not comprehensive, may not always be publicly available, do not capture
irregular migrants, and may overcount migrants.

Globalization, Urbanization & Migration (GUM) website – Although there is no comprehensive, comparative global dataset on
the relationship between cities and immigration, GUM’s global urban database is a first effort to create one. Based on country
census data and UN urbanization data, the database includes urban-level data that measure immigration for more than 150
metropolitan areas (over 1 million inhabitants) in more than 50 countries). Data cover traditional immigrant gateway cities and
emerging destinations.

These key data sources on urbanization are important for migration research:

 The World Urbanization Prospects—UN DESA’s has been issuing since 1988 annually updated estimates and
projections of the urban and rural populations for all countries of the world, and of their major urban agglomerations.
 The UN Statistics Division’s Demographic Yearbook data collection system compiles and disseminates data from
national statistical offices on population density and urbanization. Several tables, presented in the yearbook, provide
disaggregated statistics by urban and rural breakdown. Data on population of capital cities and cities of 100,000 and
more inhabitants are also available. The UN Population Division uses these data for estimates presented in World
Urbanization Prospects.
 The United Nations Human Settlements Programme (UN-Habitat) collects, compiles, analyses and reports data on
national, urban/rural and city level in order to monitor human settlement conditions and trends. UN-Habitat’s key
publications include the Compendium of Human Settlement Statistics, the Global Reports on Human Settlements, and
the State of the World’s Cities Reports series.

The Global Urban Observatory (GUO) at UN Habitat is a specialized statistical unit, that supports data collection and analysis for
urban indicators. GUO also maintains the Global Urban Indicator database, and supports the monitoring and reporting of the
New Urban Agenda and SDG 11, which seeks to “make cities and human settlement inclusive, safe, resilient and sustainable.“

Data strengths & limitations-Data on urbanization and migration show that migration is driving —and will continue to drive –
the growth and diversity of cities. However, certain limitations in migration data and data linking migration and urbanization
prevent researchers and policy makers from fully understanding the impact of migration on cities and how moving to a city
affects migrants. Such data—as well as the political will to use data when available—are needed for effective urban planning,
better socio-economic policies and services that facilitate migrant integration, policy coherence, and informed coordination
across different levels of governments and other stakeholders.

Various limitations on using censuses, surveys, populations registers, and administrative sources for research on migration and
urbanization are covered in IOM’s World Migration Report 2015. Further limitations on migration data are covered on 9
the migration data sources page and other thematic pages.

Key limitations specific to data linking migration and urbanization include:

Lack of standard definitions – What is considered urban or a city varies from country to country and sometimes it varies over
time within countries, making comparative analysis difficult. There is also no standard definition for who is considered a migrant.
Some countries define "migrant" by country of birth; others by nationality.

There is also no single global standard definition for internal migration, which in some countries drives urbanization more than
international migration.

Lack of foreign-born data at the urban level – Even if definitions were standardized, most countries only collect and aggregate
foreign-born data at the national or state level and not at an urban level. This is true especially of foreign-born urban
populations in most low-income countries. Such data could allow city governments to not only meet, but also better anticipate
the migrants’ housing, health care, and educational needs, for example.

Lack of data disaggregated by age and sex – If foreign-born data exist at the urban level, they are not always disaggregated by
factors such as age, sex, or disability. Such data could provide local governments with information to estimate the needs and
gaps in services for particular groups of migrants such as children, youth, older persons, and disabled migrants

STRATEGIES TO REDUCE IMPACT OF URBANIZATION

Combat poverty by promoting economic development and job creation. Involve local community in local government. Reduce air
pollution by upgrading energy use and alternative transport systems. Create private-public partnerships to provide services such
as waste disposal and housing.

Here’s a comprehensive overview of strategies for urbanization, migration, and employment, focusing on sustainable
development and social inclusion.

Urbanization Strategies

1. Smart Urban Planning

- Mixed-Use Development: Encourage residential, commercial, and recreational spaces to coexist, reducing travel times and
promoting local economies.
- Zoning Regulations: Update zoning laws to support high-density housing and green spaces, facilitating efficient land use.

2. Sustainable Infrastructure
- Public Transportation: Invest in reliable and affordable public transit systems to reduce traffic congestion and pollution.
- Green Buildings: Promote energy-efficient building practices and retrofitting existing structures to minimize environmental
impact.

3. Public Spaces and Amenities

- Parks and Recreation: Create and maintain parks and recreational facilities to enhance quality of life and community
engagement.
- Community Centers: Develop multipurpose centers that provide social services, education, and cultural activities.

4. Resilience Planning
- Disaster Preparedness: Implement strategies for climate adaptation and disaster response to protect urban populations.
- Infrastructure Upgrades: Regularly assess and upgrade urban infrastructure to handle increased population and climate
challenges.

Migration Strategies

1. Inclusive Policies
- Integration Programs: Develop programs that support newcomers in adapting to local cultures, languages, and job markets.
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- Anti-Discrimination Policies: Enforce laws that protect migrants from discrimination in housing, employment, and services.

2. Skills Recognition
- Credential Recognition: Establish systems to assess and recognize foreign qualifications and skills to facilitate employment.
 - Language Training: Provide accessible language courses for migrants to enhance communication and job prospects.

3. Community Engagement
- Local Partnerships: Foster collaborations between government, NGOs, and community organizations to support migrant
integration.
- Cultural Exchange Programs: Promote initiatives that celebrate cultural diversity and foster mutual understanding.

4. Support for Refugees

- Asylum Processing: Streamline processes for asylum seekers while ensuring their rights and safety.
- Social Support Services: Provide access to healthcare, education, and housing for refugees.

Employment Strategies

1.Job Creation Initiatives

- Support for Startups: Offer grants, loans, and training programs to foster entrepreneurship and innovation.
- Local Business Incentives: Create tax incentives for businesses that hire locally or invest in underrepresented areas.

2. Skills Development
-Vocational Training Programs: Implement programs that align with local labor market needs, focusing on high-demand skills.
-Lifelong Learning: Encourage continuous education and training for workers to adapt to changing job markets.

3. Access to Employment
-Job Matching Services: Develop platforms that connect job seekers with employers based on skills and availability.
- Transportation Solutions: Provide subsidies or services that improve access to job sites, especially in underserved areas.

4. Flexible Work Arrangements

- Remote Work Policies: Encourage businesses to adopt flexible working arrangements that can improve work-life balance.
- Part-Time and Gig Work Opportunities: Support the development of a diverse job market that includes part-time and
freelance options.

Monitoring and Evaluation

- Data Collection and Analysis: Establish robust data systems to track urbanization, migration patterns, and employment trends.
- Stakeholder Engagement: Involve community members, businesses, and policymakers in evaluating the effectiveness of
strategies.
- Adaptive Management: Use feedback and data to adapt strategies based on changing conditions and community needs.
Conclusion

Implementing these strategies requires collaboration among government, private sector, civil society, and local communities.
The goal should be to create inclusive, resilient urban environments that provide opportunities for all residents, whether long-
standing locals or newcomers. This holistic approach can help address the challenges of urbanization and migration while
promoting sustainable economic development.

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