Study of Causal Relationship between Poverty and Migration from Rural to Urban Areas in Iran

Since there is a close relationship between poverty and migration from rural to urban areas in Iran, determining the quality and quantity of the relationship between these two variables can effectively help to explain the rural and urban development policies. Therefore, this study aimed at investigating this relationship using both Toda-Yamamoto (TY) and Bounds tests as well as the data of population and its natural growth rate, the percentage of poor people, and Gini coefficient during 1985-2913. The results of both causality tests showed that migration and poverty were closely linked and had a two way relation; in addition, the rural poverty could be the cause of migration from the rural to urban areas, and the migration could also lead to rural poverty alleviation. In other words, the migration leads to poverty mitigation in the rural area. Therefore, the government can improve the allocation of funds in accordance with the situation of migrants, including informal jobs.