STORY Aug 09, 2018

As countries urbanize, poverty falls


The fall in poverty rates across all regions since the the 1980s is strongly correlated with increased urbanization. Poverty is typically higher in rural areas than in urban areas, and as countries develop and people move out of rural to urban areas and to more productive jobs, poverty also declines.

However, the relationship is not the same across all regions, with South Asia having relatively low poverty compared to its degree of urbanization. Proper adjustment for price differences between rural and urban areas, as well as consistent definitions of rural and urban areas, is important for better understanding the relationship between rural and urban poverty across the world.