Does Urbanization Affect Rural Poverty? Evidence from Indian Districts

Cali, Massimiliano ; Menon, Carlo

Oxford University Press on behalf of the World Bank

关键词: agricultural products;    chronic poverty;    economic growth;    global poverty;    incidence of poverty;   

DOI  :  10.1093/wber/lhs019

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Although a high rate of urbanization and a high incidence of rural poverty are twodistinct features of many developing countries, there is little knowledge of theeffects of the former on the latter. Using a large sample of Indian districts from the1983–1999 period, we find that urbanization has a substantial and systematicpoverty-reducing effect in the surrounding rural areas. The results obtained throughan instrumental variable estimation suggest that this effect is causal in nature and islargely attributable to the positive spillovers of urbanization on the rural economyrather than to the movement of the rural poor to urban areas. This rural poverty-reducingeffect of urbanization is primarily explained by increased demand for local agriculturalproducts and, to a lesser extent, by urban-rural remittances, the rural land/population ratio, and rural nonfarm employment.