‘New Evidence on the Urbanization of Global Poverty’. Policy Research Working Paper No. 4199

We find that one-quarter of the world’s consumption poor live in urban areas and that the
proportion has been rising over time. By fostering economic growth, urbanization helped reduce
absolute poverty in the aggregate but did little for urban poverty. Over 1993-2002, the count o
the “$1 a day” poor fell by 150 million in rural areas but rose by 50 million in urban areas. The
poor have been urbanizing even more rapidly than the population as a whole. There are marked
regional differences: Latin America has the most urbanized poverty problem, East Asia has the
least; there has been a “ruralization” of poverty in Eastern Europe and Central Asia; in marked
contrast to other regions, Africa’s urbanization process has not been associated with falling
overall poverty. Looking forward, the recent pace of urbanization and current forecasts for
urban population growth imply that a majority of the world’s poor will still live in rural areas
for many decades to come.