7 been slightly better endowed to begin with (as suggested by their somewhat lower initial poverty incidence – 16.2 percent among rural‐city migrants versus 23.2 percent among rural‐town migrants).<sup>10</sup> And city migration may also be riskier than town migration, as suggested by the larger increase in poverty and larger decline in average incomes among city‐rural migrants than among town‐rural migrants.<sup>11</sup> The decomposition findings based on the national panel also abstract from longer run feedback effects between cities and towns.<sup>12</sup> Application of the same decomposition to the famous long running Kagera Health and Development Survey (KHDS) (early 1990s‐2010) provides complementary insights. This is also the sample on which much of the empirical analysis in the remainder of the paper will be based. KHDS is a data set of migrants from Kagera, a large, remote and primarily rural region in the north‐western part of Tanzania. We have information on 4,339 individuals, first interviewed in their baseline communities in the early 1990s and then re‐interviewed nearly two decades later in 2010. The data set is unique, because of its unusually long time frame and because it tracked all original individuals who left for other rural areas, towns and cities (De Weerdt et al., 2012).

Contrary to the 2008‐2012 period at the national level, there was a considerable amount of growth and poverty reduction in the KHDS sample over its 18‐year span (Table 2). Per capita incomes rose by 77 percent and the poverty headcount declined by 24 percentage points. Yet, as before, movers contributed more than non‐movers, in terms of poverty reduction (55 versus 45 percent), and especially in terms of growth (71 versus 29 percent). Further disaggregation of the contribution of the movers shows that rural‐urban migration contributed more than migration within rural areas, and especially that rural‐town migration contributed more to poverty reduction than migration of rural citizens to the cities, despite a much larger reduction in poverty from moves to the city.<sup>13</sup> As in the national panel, this follows from the substantially larger share of the migration population ending up in towns than in the city (just under twice as much). In the KHDS sample, migration to towns also contributed more to income growth, as the difference in the per capita income gain between migrants to cities and towns was not large enough to offset the effect of the much larger number of rural‐urban migrants that ended up in the towns.

In conclusion, while the typical move from a rural area to big city increases income and reduces poverty by more than the typical move from a rural area to a small town, there are so many more moves from rural to small towns that in aggregate it is these moves—the rural‐town part of urbanization— 10 Young (2013) highlights the importance of sorting in rural‐urban migration.

11 A larger share of town migrants also returned to the village, which reduced the amount of poverty reduction more than city‐rural migration. Yet, the net contribution of rural‐town migration to poverty reduction is still larger than the net contribution of rural‐city migration, and the income (and poverty) losses per return migrant are lower. To see this, note that the net contribution of rural‐town (105.6‐32.1=73.5 percent) could be approximated by reducing the overall contribution of rural‐town migration to poverty reduction (105.6 percent) by the expected contribution to poverty increase following town‐rural return (32.1 percent). Similarly, the net contribution of rural‐ city migration is 39.7 percent (49.4‐9.7=39.7 percent).

12 See Dorosh and Thurlow (2013, 2014) for some economywide modeling simulations of the differential effects on national poverty and economic growth of a similar productivity increase among citizens in rural areas, towns or cities.

13 As in the national panel, Dar es Salaam and Mwanza are the only two cities considered. Tightening the definition to count only Dar as a city or broadening it to include all cities administratively defined as cities, does not change the conclusions.