Agglomeration Economies and Wellbeing: Evidence from India

This paper argues that large cities by virtue of being more productive are able to offer better economic and non-economic opportunities. Even the slum residents located at the lower rungs of the socio-economic ladder are able to derive these benefits through income, education and health linkages. The well-being index constructed on the basis of certain economic, social, demographic, health and education specific variables collected through a primary survey in four cities shows its positive association with city size and its variation in relation to the nature of the city. The percentage of slum dwellers residing in the bottom size classes is lower in large and industrialized city compared to the ones which are stagnant and lack economic growth. However considerable poverty also exists in large cities notwithstanding agglomeration benefits and this makes a case for urban employment support programmes.