Publication: Gold Mining and Proto-Urbanization: Recent Evidence from Ghana
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2016-06-11
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2016-05-17
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Central place theory predicts that agglomeration can arise from external shocks. We investigate whether gold mining is a catalyst for early stages of urbanization in rural Ghana. We call this phenomenon proto-urbanization. Using cross-sectional data, we find that locations with gold mines exhibit most of the tell-tale signs of proto-urbanization. They have higher population densities, and they are also sites where more sophisticated forms of economic activity agglomerate. These findings are consistent with agglomeration effects that induce non-farm activities to coalesce in a particular location. Over time, we find that an increase in gold production is associated with more specialization, but not with a clear sectoral transformation of employment. We also find that the changes arising from increasing gold production are not reversed when large gold mines shrink. Rather, they continue to become more consistent with processes of structural transformation.
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Publication Gold Mining and Proto-Urbanization(World Bank, Washington, DC, 2015-06)Central place theory predicts that agglomeration can arise from external shocks. This paper investigates whether gold mining is a catalyst for proto-urbanization in rural Ghana. Using cross-sectional data, the analysis finds that locations within 10 kilometers from gold mines have more night light and proportionally higher employment in industry and services and in the wage sector. Non-farm employment decreases at 20–30 kilometers distance to gold mines. These findings are consistent with agglomeration effects that induce non-farm activities to coalesce in one particular location. This paper finds that, over time, an increase in gold production is associated with more wage employment and apprenticeship, and fewer people employed in private informal enterprises. It also finds that the changes arising from increasing gold production are not reversed when large gold mines shrink. 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