The theoretical predictions on a sample of Indian districts in the period 1981-1999vis done, and it is found that urbanization has a substantial and systematic poverty reducing effect in surrounding rural areas. This effect is largely attributable to positive spillovers from urbanisation rather than to the movement of the rural poor to urban areas per se. Results using estimation suggest that this effect is causal in nature (from urbanisation to rural poverty). [SERC DISCUSSION PAPER 14].
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