poor is higher in secondary towns than in mega cities, as observed in Tanzania<sup>6</sup> . Put differently, even though they may on average earn less (the wage distributions in secondary towns being more compressed), the higher likelihood of finding a job (given higher demand for unskilled and semi-skilled labor)<sup>7</sup> may give them a higher chance of exiting poverty. On the supply side, lower migration costs and the ability to maintain and exploit closer social ties with the areas of origin might further favor migration of the rural poor to nearby towns to find off-farm employment and exit poverty, as opposed to distant cities.<sup>8</sup> But lower agglomeration economies in rural towns might also lead to slower economic growth (and job creation), possibly inducing a growth-equity trade-off.

In addition to the direct impact on poverty from rural-urban migration by the rural poor, there are also positive spillovers of urban centers on the rural hinterlands, through consumption linkages, urban-rural remittances, the upward pressure on agricultural wages, and the generation of rural non-farm employment<sup>9</sup> (Lanjouw and Murgai, 2009; Cali and Menon, 2013).<sup>10</sup> This is especially important as 70 percent of the world’s poor are estimated to be rural (World Bank, 2008). Whether the positive spillover effects on (aggregate) rural poverty are stronger for metropoles than for secondary towns is not clear _a priori_ . The magnitude of the positive spillover effects on rural poverty in the hinterlands of metropoles

> 6 Rural unemployment was estimated around 7 percent, urban unemployment around 16 percent and unemployment in Dar es Salaam around 31 percent (Glasser et al., 2008).

> 7 Unskilled and semi-skilled workers often make up the vast majority of the workforce in rural towns, while semi-skilled and skilled workers dominate the workforce in the cities, as observed for example in Ethiopia and Uganda (Dorosh and Thurlow, 2012).  Introduction of migrant heterogeneity in the standard H-T framework, sorting across cities by skill set and easier access to information about jobs, may further explain the lower unemployment rates in secondary towns and larger poverty reduction effects from migration to secondary towns. On the other hand, persisting hope to strand a high paying job or set up a thriving business, coverage of the basic expenses (e.g. housing) by the urban social networks, and the shame associated with admitting failure would all conspire against an early return when unsuccessful, inducing migrants to queue and helping explain the persistence of large informal settlements in many large cities.

> 8 For an excellent comprehensive theoretical and empirical survey of the determinants of rural-urban migration in developing countries, see Lall, Selod and Shalizi (2006).

> 9 Rural off-farm employment generation can reduce (rural) poverty directly through the provision of additional income (Owusu, Abdulai, and Abdul Rahman, 2011) or indirectly by alleviating credit and liquidity constraints enabling the adoption of more remunerative agronomic practices as well as by helping farmers preserve their productive assets and smooth their consumption (Barrett, Reardon and Webb, 2001).  This also highlights the continuing importance of agricultural growth for poverty reduction

> 10 Cali and Menon (2013) estimated the contribution of secondary town spillovers to rural poverty reduction in India during 1983-1999 to be 13 to 25 percent.

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