Population concentration, urbanization, and demographic transition

This paper investigates how urbanization and demographic transition interrelate with each other via merits (agglomeration economies) and demerits (congestion diseconomies) of population concentration. It reveals the mechanism by which agglomeration economies and congestion diseconomies affect the fertility rate. Furthermore, analysis also shows that by assuming declines in infant and child mortality rate, the model developed in this paper can replicate the following well-known historical patterns: (i) advances in urbanization, (ii) rises in the wage rate, (iii) declines in fertility, and (iv) rises followed by declines in the population growth rate (the inverted U-shaped demographic transition).