Where to create jobs to reduce poverty: cities or towns?

Ravi Kanbur, Luc Christiaensen and Joachim De Weerdt

The Journal of Economic Inequality, 2019, vol. 17, issue 4, No 5, 543-564

Abstract: Abstract Should job creation be targeted to big cities or to small towns, if the objective is to minimize national poverty? To answer this question, we develop an equilibrium model of migration from rural areas to two potential destinations, small town and big city. We develop sufficient statistics for policy decisions based on the parameters of the model. The empirical remit of the theoretical model is illustrated with long running panel data from Kagera, Tanzania. Further, we show that the structure of the sufficient statistics is maintained in the case where the model is generalized to introduce heterogeneous workers and jobs.

Keywords: Secondary Towns versus big cities; Poverty reduction; Poverty gradient; Todaro model; Migration equilibrium; Equilibrium income distribution (search for similar items in EconPapers)
JEL-codes: I3 J61 O18 O41 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (10)

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DOI: 10.1007/s10888-019-09419-5

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