The benefits I witness:
A barefoot childhood (no worries about glass, needles, etc where we can run and play)
A daily exposure to agriculture and where their food comes from
A daily exposure to wildlife and a respect for it
A daily exposure to seasonal change in big ways, and more importantly, the small, the kind that require that you be in touch with them daily to see the changes.
A less consumerist culture to grow up in (not just our family - culturally village life is not built around shopping as entertainment- there is a farmer's market weekly, one co-op grocery store in town, farm market stalls along the highway, small locally owned shops for books, clothes, drugs etc, we don't have any kid's clothes shops in town - our shopping for clothing is ALL at a second hand store called Frenchy's. It's a chain! We have one mall in the entire Annapolis Valley - in New Minas - and we NEVER go there. New Minas is home to all the yucky big box stores like Staples, Walmart, Sears, Home Depot, etc. I don't take my kids shopping in New Minas so while those options exist, it's been easy to shelter my children from them. My kids are growing up spending their allowance on locally produced goods, that they buy directly from the producer, and it's so easy.
Knowing their neighbours, who are also their police officers, firemen, teachers, pharmacist, doctor, dentist, handyman, etc. Everyone has a face and a name and an address.
"It takes a village to raise a child" means here you know if your child is getting into mischief you'll hear about it, and that person will know your child well enough to feel they can say something to them - there are more natural consequences to learn from in a culture where people feel they are involved with one another.
Because there are so many lessons being learned easily about being a good neighbour, kids are granted more freedom for independence earlier. Kid's walk to school, they bike about town, they run off in their own little gang on market day. They are allowed to have their own culture, still, like we had as kids.
A "make do, repair, reuse, respect" kind of materialism.
The kids are exposed to a lot of local culture like local music and art and theatre, it isn't something produced by "stars" it's produced by people they know. So they feel empowered to be involved in the arts too.
Green space and quiet have been proven to be vitally important to reducing stress and alleviating stress symptoms in kids with ADHD, as well as those who have a positive family history of mental illness.
We rely on a car to go places out of town.
It requires a trip to the city, and the exhaustion that's part of that kind of day, to go to bigger world class museums. We can't just pop into the Discovery Centre any old day...but that might not even be important, we can pop off to a lake, the woods, a river, a mountain, a bog, a swamp, or a variety of ocean side habitats any old day. A museum exhibit on tidepools doesn't compare with the real thing.
While we still live in a multicultural community, I worry about "tokenism". In a city they'll meet lots of people from a different cultural group, sometimes there are whole neighbourhoods. In a small community they'll still meet people from all corners of the globe, but it might mean, for example, that their only experience of Chinese culture is with *one* family that lives on our street. Their only experience of Caribbean culture might be through migrant workers .
To be honest I have never seen any benefits in suburban living!