Abstract ：
We present a closed overlapping generations model with two regions: urban and rural. Concentration of population to urban areas involves population inflows from rural areas, worsening congestion. Inverse agglomeration in rural areas exerts negative effects on rural income, thereby increasing the attractiveness of urban areas. Because of lower urban fertility rates, urbanization involves population decreases. Therefore, population dynamics might be explained as simultaneous urbanization and population contraction.

Keywords : fertility, migration, population contraction, urbanization
JEL classifications: J11, J13, R13, R23