Is the Locus of Poverty Changing?

Urbanization is now a dominant demographic phenomenon in low- and middle-income countries. By the year 2000, half of the world's population will live in urban areas; of this half, two thirds will be in developing countries, predominantly in Asia. Whether there will be a corresponding shift of poverty from rural to urban areas is the central question of this analysis. Evidence from cross-sectional, time-series, and case data indicates that the percent of poverty in urban areas is dependent on income levels, income growth, and income distribution. The evidence also indicates that the number of poor in rural areas will exceed those in urban areas well into the 21st century. These poverty and urbanization trends are significant politically, and important also with respect to food policy and required investments in agriculture.

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