When Distance Drives Destination, Towns Can Stimulate Development

While city migrants see their welfare increase much more than those moving to towns, many rural-urban end up in towns. This phenomenon, documented detail Kagera, Tanzania, begs the question why move seemingly suboptimal destinations. Using an 18-year panel of individuals from this region and information on possible destinations census, study documents, through dyadic regressions controlling for individual heterogeneity, how deterrence further distance cities (compared towns) largely trumps attraction promise greater wealth, making towns appealing Education mitigates these effects (lesser distance; wealth), while poverty reduces consistent with notion urban sorting. With about two thirds rural population low-income countries living within hours a town, findings underscore importance vibrant inclusive development.