8 which account for the greater share of poverty reduction. But this in turn raises the question—if the move to the big city is expected to raise income by far more, why would anyone move to the small town at all, especially since the difference in poverty incidence at baseline (an indicator of credit constraint) between town and city migrants is relatively small in the national data or even zero in the case of the KHDS sample.

One obvious explanation may relate to selectivity. This would hold that it is especially the more educated and the more entrepreneurial, who are smaller in number, that make it to and in the city, where the returns to skills also tend to be higher (Young, 2013; Diamond, 2016; Hicks et al., 2017). There are some signs of that. The KHDS data set shows a clear education gradient with respect to migration destination. Out of migrants from rural origins, who are no longer in school, those moving to other rural areas have an average of 6 years of formal education, those who moved to secondary towns 7 years, and those who moved to cities 8 years. Ninety‐three percent of those moving to the city have completed primary, while only 65% and 79% of those moving to rural locations and secondary towns, respectively, have completed primary. The city disproportionately attracts people with more years of formal schooling. This is also consistent with the larger gain in income among those moving to the city.

Yet, the fact that more of the better educated end up in the cities does not necessarily imply that there are no extra income gains from moving to the city for the less educated, compared with moving to the towns.<sup>14</sup> To get a more systematic handle on the question as to why, in equilibrium, more rural people move to towns, even though the gains are larger when moving to the city, the next section builds on the insights from Harris‐Todaro.

# 3 Extending the Harris‐Todaro Framework

Migration equilibrium when there is a single destination from the rural area was worked out in the classic papers by Todaro (1969) and Harris and Todaro (1970). There have been many advances in the literature since then, but the power of the framework to address migration issues remains undiminished.<sup>15</sup> We will use this framework to answer the question posed in the last section, if the typical move from rural to big city leads to a larger gain than the typical move from rural to small town, why are there so many more moves to small towns?<sup>16</sup> We begin the analysis with a single urban destination to introduce notation and establish benchmarks. In the simple Todaro (1969) model agents are identical, there is a single rural wage _wr_ and 14 In comparing (nominal) wage gaps with rural agricultural wages across Abidjan and other urban areas for employees with primary or higher education (secondary and tertiary), Christiaensen and Premand (2017, Table 2.1) find for example that the difference in the rural wage gaps with Abidjan ( _wcp‐wrp_ ) and other urban areas ( _wsp‐wrp_ ) tends to be higher for those with primary education (p) than the difference in the rural wage gap with Abidjan ( _wch‐wrh_ ) and other urban areas ( _wsh‐wrh_ ) among the higher educated (h). (Abidjan, other urban/secondary towns and rural are denoted by c, s and r, respectively.) Put differently, _(wcp‐wrp)‐(wsp‐wrp) > (wch‐wrh)‐(wsh‐wrh)_ or _(wcp‐ wsp)>(wch‐wsh)_ , which would imply larger gains from moving to towns for those with primary education than for those with higher education, at least in Côte d’Ivoire.

> 15 For a recent paper that incorporates many of these advances, see Basu, Chau, Fields and Kanbur (2016).

> 16 This section draws on the analysis presented in Christiaensen, De Weerdt and Kanbur (2017).