Cities and Specialization: Evidence from South Asia

Marcel Fafchamps, Forhad Shilpi, Decrg and The World Bank

No 139, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: Theories of city formation typically revert around agglomeration externalities driven by returns to specialization. Using survey data from Nepal, we test these theories by examining the relationship between proximity to urban centers and the organization of labor. We show that wards located in and near cities have more diversified and more market oriented activities. This suggests returns to specialization harnessed through the market. Wage work, work away from home, and unemployment are more prevalent in and around cities. These effects are felt up to four hours of travel time from large cities. We also find evidence of a weak relationship between city size and firm size. Urban specialization, however, does not extend to household chores. Urbanization is associated with lower female labor market participation and with specialization of women in market-related activities or strictly home-based chores.

Keywords: spatial specialization; urbanization; household chores (search for similar items in EconPapers)
JEL-codes: R12 (search for similar items in EconPapers)
Date: 2003-01-01
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Citations: View citations in EconPapers (11)

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Journal Article: Cities and Specialisation: Evidence from South Asia (2005)
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