Paper short abstract:

The paper discusses different theories explaining the existence of an urban-rural divide and presents novel evidence of the urban-rural disparity in multidimensional poverty. We find that poverty is still largely a rural phenomenon, and discuss how the Covid-19 pandemic may affect this outcome.

Paper long abstract:

Since the 1950s a considerable amount of international literature has focused on understanding the reasons behind the persistence of substantially higher poverty rates in rural areas. Over the last decade, instead, this debate has substantially lost momentum. The reasons are unclear as there is no evidence that the problem vanished. Moreover, this seems a critical matter also considering the urban-rural differentiated effects of Covid-19 and government responses.

The two main objectives of the paper are, firstly, to review critically the main theories that tried to explain the urban-rural gap some decades ago and predict, based on them, the trajectories of the rural-urban poverty ratio over time; secondly, to assess empirically the level and recent trends of rural-urban poverty gap in about 60 low- and middle-income countries. By endorsing a multidimensional approach to poverty, we avoid the problem of differential prices in urban and rural contexts which hinder studies focusing on income poverty. As comprehensive cross-country studies on the urban-rural disparity in multidimensional poverty are lacking, we contribute to filling this research gap.

For the empirical analysis, we use two individual-level indices of multidimensional poverty: the G-CSPI and G-Mo, which incorporate three dimensions: education, health and decent employment. Rural-urban disparities in poverty are measured through the rural/urban ratio of the poverty indices.

The findings confirm that poverty is still predominantly a rural phenomenon, thus suggesting that anti-poverty interventions should still mainly focus on rural households. Finally, we elaborate on the probable effects of the Covid-19 pandemic on the urban-rural poverty gap.