Abstract
This paper documents strong but differentiated links between climate and urbanization in large panels of districts and cities in Sub-Saharan Africa, which has dried substantially in the past fifty years. The key dimension of heterogeneity is whether cities are likely to have manufacturing for export outside their regions, as opposed to being exclusively market towns providing local services to agricultural hinterlands. In regions where cities are likely to be manufacturing centers (25% of our sample), drier conditions increase urbanization and total urban incomes. There, urban migration provides an "escape" from negative agricultural moisture shocks. However, in the remaining market towns (75% of our sample), cities just service agriculture. Reduced farm incomes from negative shocks reduce demand for urban services and derived demand for urban labor. There, drying has little impact on urbanization or total urban incomes. Lack of structural transformation in Africa inhibits a better response to climate change.