Does Urbanization Affect Rural Poverty? Evidence from Indian Districts

Calì, Massimiliano; Menon, Carlo

Does Urbanization Affect Rural Poverty? Evidence from Indian Districts

2013

Calì, Massimiliano | Menon, Carlo

Although a high rate of urbanization and a high incidence of rural poverty are two distinct features of many developing countries, there is little knowledge of the effects of the former on the latter. Using a large sample of Indian districts from the 1983-1999 period, the authors find that urbanization has a substantial and systematic poverty-reducing effect in the surrounding rural areas. The results obtained through an instrumental variable estimation suggest that this effect is causal in nature and is largely attributable to the positive spillovers of urbanization on the rural economy rather than to the movement of the rural poor to urban areas. This rural poverty-reducing effect of urbanization is primarily explained by increased demand for local agricultural products and, to a lesser extent, by urban-rural remittances, the rural land/population ratio, and rural nonfarm employment.

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AGROVOC Keywords

access to markets agricultural land agricultural productivity agricultural products agricultural trade agricultural workers capacity building consumer prices crop production developed countries developing countries development economics development policies diversification econometric models economic activities economic conditions economic development economic growth farmers food products growth rate immigration income industrialization insurance international trade land productivity land reform natural resources nutrition population density population dynamics poverty reduction public investment public policies remittances risk factors rural areas rural development rural employment rural poor rural population rural poverty rural welfare trade liberalization urban areas urban poor urban population urban poverty urbanization workforce working population

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Publisher

World Bank, Washington, DC

Other Subjects

Child labor; Relative importance; Rural labor; Rural people; Adult population; Immigrants; Population data; Comparative advantage; Income inequality; Developing world; Poverty gap index; Serial correlation; Political economy; Policy discussions; Population decreases; Poverty dynamics; Lagged values; Daily wage; Urban population distribution; Developing country; Per capita expenditure; Poor people; Poor population; Covariance matrix; Labor supply; Developing regions; World population; Rural villages; Independent variable; Land prices; Urban population growth; Significant effect; Population variable; Economic activity; Relative contribution; Young adults; Regional perspective; Distribution function; Rural banks; Poverty impact; Industrial revolution; Number of people; Rural consumer; Resource constraints; Immigrant; Incidence of poverty; Credit markets; Poverty incidence; Household composition; Land supply; Urban workers; Migration flows; Social science; Dependent variable; Policy research; Economic changes; Implications for development; Estimation method; Spatial scale; National council; Important policy; Fixed effects estimation; Fixed effects; Number of migrants; Urban populations; Chronic poverty; Agricultural wages; Negative effect; Small villages; Poverty data; Poverty rates; Headcount ratio; Descriptive statistics; Rural workers; Poverty estimates; Marginal returns; Rural bank; Poverty line; Rural consumers; Rural wages; Structural transformation; Rural; Development report; Rural policy; Water sources; Explanatory variables; Economic reforms; Household survey; Poverty profile; Poverty decline; Economic policy; Self-employment; Internal migrants; Poverty reduction impact; Rural migration; Migrant; Development policy; Welfare impact; Rural migrants; Progress; Agricultural productivity growth; Empirical evidence; Empirical section; Rural roads; Poorer people; Poverty lines; Push factors; Rural households; Rural linkage; Urban migration; Rural economy; Remittance; Mean value; Rural schooling; Rural district; Future population; Cultural change; Demand for food; Poverty gap; Unequal distribution; Arid tropics; Tradable sectors; Policy research working paper; Consumption data; Poverty change; Poverty reducing; Poverty levels; Population variables; Global poverty; Production volumes; Push factor; Young adult; Population and development; Poverty measure; Policy implications; Rate of growth; Pull factors; Economic performance; Regional impacts; Labor force; Labor market; Agricultural employment; Reduction in poverty; Rural sector; Landless households; Monetary economics; Agricultural laborers; Level of poverty; Urban dwellers; Spillover; High growth; Rural poverty rate; Rural linkages; Rural area; Respect; Rural poverty reduction; Urban growth; Rural poverty line; National levels; Farm employment

Language

English

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application/pdf, text/plain

License

CC BY 3.0 IGO, http://creativecommons.org/licenses/by/3.0/igo/, World Bank

In AGRIS since: 2024-10-18

Modification date: 2025-10-25

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DOI http://documents.worldbank.org/curated/en/2013/01/17197617/urbanization-affect-rural-poverty-evidence-indian-districts https://hdl.handle.net/10986/12162

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Does Urbanization Affect Rural Poverty? Evidence from Indian Districts

2013

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