ABSTRACT
Studies on the trade-poverty relationship commonly focus on rural poverty, considering that poverty is predominantly a rural phenomenon; urban poverty, as such, has not received matching attention. Macours and Swinnen (2008) observe that urban poverty is generally lower than rural poverty, and largely moves in the same direction as rural poverty. The difference between urban and rural poverty varies strongly across countries. Urban poverty, in fact, tends to be more and more severe as individual countries become increasingly integrated into the world economy. Urban poverty is different from rural poverty in several respects. The primary concern of the urban poor usually relates to the living and working conditions in towns and cities, such as housing, occupation, income inequality, and pollution. In contrast, their rural counterparts worry mostly about income and starvation. The measures of urban poverty that utilise the income-or expenditure-based approach may therefore be inadequate. The urban poor tend to be the first victims of the economic slowdown, as unemployment is the primary cause of poverty, especially in urban areas. The immediate effects of unemployment on urban people may be more severe than those on their rural counterparts, as the economic shocks often originate from the centres of business and commerce, which are largely located in urban areas. With an increasing rate of rural-to-urban migration in developing and/or transitional economies, rural poverty becomes closely related to urban poverty. The World Bank (2011b) conjectures that the growth and reduction in the poverty of small towns will help Vietnam to reduce rural poverty.
