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Urbanization increases the consumer class as well employment. More people in cities will create more jobs. A bigger consumer class will obviously consume more resources and employment ensures people have money to spend. These two together increase consumer spending and hence drives the economy and state spending.
For example: An increase in Urban population will increase the need of infrastructure, food, healthcare facilities, etc. and thus will increase the need of human resource creating jobs. These people will earn and spend thus driving economy. These people will save also...thus giving money back to banks. Banks give this money to industry in form of loans.
So, this a whole cycle and everything is connected.
Wiki User
∙ 11y ago
Wiki User
∙ 11y agoas one of the characteristics of urbanization, population growth in metropolises promotes the growth of consumption, at the same time also brings the problem of unemployment. Due to the influx of rural population and people's daily needs, such as food, clothes and transport, the percentage of consumption in economy increases more rapidly than before, this would conduce to national economic development. However, the price of labor declines increasingly seriously, which has caused a large number of unemployment, the same because of the population expansion in city.
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