The Relationship Between Urbanization and Household Income: Lesson From Amhara Region Metropolitan Cities

The Relationship Between Urbanization and Household Income: Lesson From Amhara Region Metropolitan Cities

Melaku Kebede (Bahir Dar University, Ethiopia)
Copyright: © 2020 |Pages: 12
DOI: 10.4018/IJPAE.2020070101
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Abstract

As urbanization has occurred without the attendant growth and development spillovers in underdeveloped nations including Ethiopia, the phenomenon brought undesirable social and economic consequences. This article investigates the relationship between urbanization and urban household income and housing problem. Structural equation modeling was used to run mediation analysis. Correlation and regression analyses were also carried out to measure the direction and magnitude of the effect of the independent variable on the dependent. Regression analysis results indicate the existence of a significant direct effect of urbanization on limitations in income generating capacity of citizens. This article recommends taking policy measures to include development agendas of small and medium towns into regional plans as they absorb the influx to large cities and can help migrants experience the challenging complex urban life step by step. In addition, a policy intervention in the area of land tenure system and real estate development is required before the housing problems gets worsened.
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3. Literature Review

Young people face higher rates of labour market turnover, and spend time moving between jobs before settling on a stable career path. The main ‘scarring’ effects of periods of joblessness are an increased likelihood of unemployment at a later age, and a lower earnings potential. Evidence suggests that young people suffer a ‘wage penalty’ (the difference between the actual wage earned and that earned by comparable people who have not experienced unemployment) on their return to work. At the worst case, unemployment increases the probability of illness, mental stress, helplessness, and depletion of self-esteem, which can all lead to depression and finally loss of income generating capacity.

Even the available job opportunities in the market usually require a lengthy work experience while the youth do not have it and this is often their central barrier to employment and income generating capacity.

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