Urbanisation benefits the poor

A new paper (PDF) by three World Bank poverty experts seems to suggest that urbanisation benefits the poor (it is summarised here). Martin Ravallion, Shaohua Chen and Prem Sangraula estimate that the rural poverty rate of 30% – using the $1 a day threshold – is more than twice the urban rate. In addition, 70% of the rural population lives on less than $2 a day, while the comparable proportion in urban areas is less than half that. To me this suggests that people migrate to cities from rural areas because they think they are likely to be better off.

It is true that an increasing proportion of the world’s poor are living in urban areas. But this trend is likely to be because of the growth of cities in absolute terms. About three-quarters of the developing world’s poor still live in rural areas.

The paper also looks at national and regional differences in patterns of poverty. It looks like it should repay closer examination.