I came across this interesting new paper by Christiaensen, De Weerdt and Todo. The argument is that people are more likely to escape poverty when they migrate to secondary towns rather than big cities. Abstract:

 A rather unique panel tracking more than 3,300 individuals from households in rural Kagera, Tanzania during 1991/4-2010 shows that about one in two individuals/households who exited poverty did so by transitioning from agriculture into the rural nonfarm economy or secondary towns. Only one in seven exited poverty by migrating to a large city, although those moving to a city experienced on average faster consumption growth. Further analysis of a much larger cross-country panel of 51 developing countries cannot reject that rural diversification and secondary town development lead to more inclusive growth patterns than metropolitization. Indications are that this follows because more of the poor find their way to the rural nonfarm economy and secondary towns, than to distant cities. The development discourse would benefit from shifting beyond the rural-urban dichotomy and focusing instead more on how best to urbanize and develop the rural nonfarm economy and secondary towns

And from the conclusions:

Agnostic about the pros and cons of urbanization per se, this paper starts from the  observation that the next wave of urban expansion is predicted to be concentrated in large cities (1 million plus) (UN, 2011) and explores whether the nature of the occupational and spatial transformation matters for poverty reduction (as opposed to growth alone). In so doing, the study differentiates itself from most of the literature which usually only applies a sectoral (agriculture versus non-agriculture) or spatial (rural versus urban) lens and draws attention to that the fact that the urbanization pattern may be more important for poverty reduction than urbanization itself.

Full paper here (pdf)