IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Does urbanisation affect rural poverty? Evidence from Indian districts

  • Massimiliano Cali
  • Carlo Menon

Although the high rate of urbanization and the high incidence of rural poverty are two distinct features of many developing countries, we still do not know the effects of the former on the latter. We address this issue by exploring the mechanisms through which urbanization may alleviate rural poverty, disentangling “first round” effects, due to migration of rural poor to cities, and “second round” effects, due to positive externalities of city growth on surrounding rural areas. We test our theoretical predictions on a sample of Indian districts in the period 1981-1999, and find that urbanization has a substantial and systematic poverty reducing effect in surrounding rural areas. This effect is largely attributable to positive spillovers from urbanisation rather than to the movement of the rural poor to urban areas per se. Results using IV estimation suggest that this effect is causal in nature (from urbanisation to rural poverty).

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://eprints.lse.ac.uk/33205/
File Function: Open access version.
Download Restriction: no

Paper provided by London School of Economics and Political Science, LSE Library in its series LSE Research Online Documents on Economics with number 33205.

as
in new window

Length: 64 pages
Date of creation: Feb 2009
Date of revision:
Handle: RePEc:ehl:lserod:33205
Contact details of provider: Postal: LSE Library Portugal Street London, WC2A 2HD, U.K.
Phone: +44 (020) 7405 7686
Web page: http://www.lse.ac.uk/

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Petia Topalova, 2007. "Trade Liberalization, Poverty and Inequality: Evidence from Indian Districts," NBER Chapters, in: Globalization and Poverty, pages 291-336 National Bureau of Economic Research, Inc.
  2. Robin Burgess & Rohini Pande, 2003. "Do Rural Banks Matter? Evidence from the Indian Social Banking Experiment," STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers 40, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  3. Philippe Aghion & Robin Burgess & Stephen Redding & Fabrizio Zilibotti, 2005. "The unequal effects of liberalization: evidence from dismantling the license Raj in India," LSE Research Online Documents on Economics 3690, London School of Economics and Political Science, LSE Library.
  4. Raghbendra Jha & K.V. Bhanu Murthy & Anurag Sharma, 2005. "Market Integration in Wholesale Rice Markets in India," ASARC Working Papers 2005-03, The Australian National University, Australia South Asia Research Centre.
  5. Subramanian, Shankar & Deaton, Angus, 1996. "The Demand for Food and Calories," Journal of Political Economy, University of Chicago Press, vol. 104(1), pages 133-62, February.
  6. Matsuyama, Kiminori, 1992. "Agricultural productivity, comparative advantage, and economic growth," Journal of Economic Theory, Elsevier, vol. 58(2), pages 317-334, December.
  7. Becker, G.S. & Murphy, K.M., 1991. "The Division of Labor, Coordination Costs, and Knowledge," University of Chicago - Economics Research Center 92-5, Chicago - Economics Research Center.
  8. Datt, Gaurav & Ravallion, Martin, 1998. "Farm productivity and rural poverty in India," FCND discussion papers 42, International Food Policy Research Institute (IFPRI).
  9. Beegle, Kathleen & De Weerdt, Joachim & Dercon, Stefan, 2008. "Migration and Economic Mobility in Tanzania: Evidence from a Tracking Survey," Policy Research Working Paper Series 4798, The World Bank.
  10. Yoko Kijima & Lanjouw, Peter, 2003. "Poverty in India during the1990s - a regional perspective," Policy Research Working Paper Series 3141, The World Bank.
  11. Atkin, David, 2010. "Trade, Tastes and Nutrition in India," Working Papers 80, Yale University, Department of Economics.
  12. Glaeser, Edward L. & Scheinkman, JoseA. & Shleifer, Andrei, 1995. "Economic growth in a cross-section of cities," Journal of Monetary Economics, Elsevier, vol. 36(1), pages 117-143, August.
  13. Ravallion, Martin, 2001. "On the urbanization of poverty," Policy Research Working Paper Series 2586, The World Bank.
  14. Lanjouw, Peter & Shariff, Abusaleh, 2002. "Rural non farm employment in India : Access, income and poverty impact," Working Papers 81, National Council of Applied Economic Research.
  15. Plantinga, Andrew J. & Lubowski, Ruben N. & Stavins, Robert N., 2002. "The effects of potential land development on agricultural land prices," Journal of Urban Economics, Elsevier, vol. 52(3), pages 561-581, November.
  16. Marcel Fafchamps & Forhad Shilpi, 2005. "Cities and Specialisation: Evidence from South Asia," Economic Journal, Royal Economic Society, vol. 115(503), pages 477-504, 04.
  17. Timothy Besley & Robin Burgess, 1998. "Land Reform, Poverty Reduction and Growth: Evidence from India," STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers 13, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  18. Kochar, Anjini, 2004. "Urban influences on rural schooling in India," Journal of Development Economics, Elsevier, vol. 74(1), pages 113-136, June.
  19. Mark E Schaffer, 2005. "XTIVREG2: Stata module to perform extended IV/2SLS, GMM and AC/HAC, LIML and k-class regression for panel data models," Statistical Software Components S456501, Boston College Department of Economics, revised 22 Feb 2015.
  20. Datt, Gaurav & Ravallion, Martin, 2002. "Is India's economic growth leaving the poor behind?," Policy Research Working Paper Series 2846, The World Bank.
  21. David Atkin, 2010. "Trade, tastes and Nutrition in India," Working Papers 986, Economic Growth Center, Yale University.
  22. Marcel Fafchamps & Forhad Shilpi, 2003. "The spatial division of labour in Nepal," Journal of Development Studies, Taylor & Francis Journals, vol. 39(6), pages 23-66.
  23. Berdegue, Julio A. & Ramirez, Eduardo & Reardon, Thomas & Escobar, German, 2001. "Rural Nonfarm Employment and Incomes in Chile," World Development, Elsevier, vol. 29(3), pages 411-425, March.
  24. Ravallion, Martin & Chen, Shaohua & Sangraula, Prem, 2007. "New evidence on the urbanization of global poverty," Policy Research Working Paper Series 4199, The World Bank.
  25. Frank Ellis, 1998. "Household strategies and rural livelihood diversification," Journal of Development Studies, Taylor & Francis Journals, vol. 35(1), pages 1-38.
  26. Jacoby, Hanan C, 2000. "Access to Markets and the Benefits of Rural Roads," Economic Journal, Royal Economic Society, vol. 110(465), pages 713-37, July.
  27. James H. Stock & Motohiro Yogo, 2002. "Testing for Weak Instruments in Linear IV Regression," NBER Technical Working Papers 0284, National Bureau of Economic Research, Inc.
  28. Rao, P. Parthasarathy & Birthal, P. S. & Joshi, P. K. & Kar, D., 2004. "Agricultural diversification in India and role of urbanization," MTID discussion papers 77, International Food Policy Research Institute (IFPRI).
  29. Foster, Andrew D & Rosenzweig, Mark R, 2004. "Agricultural Productivity Growth, Rural Economic Diversity, and Economic Reforms: India, 1970-2000," Economic Development and Cultural Change, University of Chicago Press, vol. 52(3), pages 509-42, April.
  30. Deichmann, Uwe & Shilpi, Forhad & Vakis, Renos, 2008. "Spatial specialization and farm-nonfarm linkages," Policy Research Working Paper Series 4611, The World Bank.
  31. Christopher F Baum & Mark E Schaffer & Steven Stillman, 2002. "IVREG2: Stata module for extended instrumental variables/2SLS and GMM estimation," Statistical Software Components S425401, Boston College Department of Economics, revised 09 Feb 2015.
  32. Rana Hasan & Devashish Mitra & Beyza P. Ural, 2006. "Trade Liberalization, Labor-Market Institutions, and Poverty Reduction: Evidence from Indian States," India Policy Forum, Global Economy and Development Program, The Brookings Institution, vol. 3(1), pages 71-122.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ehl:lserod:33205. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (LSERO Manager)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.