Why Are Slums Poorer Than Farms?

Via Marcelino Fuentes, the UN has a study out showing that third world slum dwellers are actually worse off than those still living in rural areas. Fuentes frames it as a question of either the rural-to-slum migrants being mistaken about the opportunities available in the city, or the UN choosing the wrong indicators of wellbeing (hence slum dwellers really are better off). Either option frames the wellbeing of the two populations as relatively independent. But I wonder whether there isn't some degree of connection between the wellbeing of people in the two locations.

I can see two ways that migration to the city might actually improve the lot of the migrants, while improving the lot of those left behind even more (meaning that slum dwellers really are worse off than their rural cousins, but that they still made a rational choice to move to, and stay in, the city). On the one hand, migration to the city may relieve rural overpopulation. Rather than everyone starving together, a reduced rural population is able to make ends meet because their neighbors went away to the city.

Adding to the simple population shift effect is the issue of remittances. It's common in the third world for some people -- typically young men -- to move to the city to look for work, leaving the rest of the family behind. So rather than just urban vs rural households, you have households that are geographically extended in order to pursue a mixed economic strategy. These migrants deliberately live cheaply in order to funnel money back to their rural homes.

Of course, neither of these explanations denies the fact that improvements to slum conditions (such as infrastructure improvements and property rights reforms) would be a good thing -- indeed, they may even have trickle-down effects on the conditions in rural areas.