Is rural contribution to aggregate poverty reduction substantial? New Evidence.

Abstract

Using the recent estimates of rural, urban and aggregate poverty rates for 31 developing countries, the present study statistically examines the extent to which the rural sector contributes to aggregate poverty reduction. After adjusting for the effect of rural-urban migration, our results suggest that the rural sector makes a substantial contribution to aggregate poverty reduction across all five regions, consistent with earlier studies arguing for the importance of rural sector growth in poverty reduction. Recent studies giving greater priority to urbanisation-especially small and secondary towns-are thus mistaken.