Urbanisation is taking place on a massive scale, and around 60% of the world’s people are expected to be living in cities by 2030. Growing urban centres are increasingly viewed as ‘engines of growth’ – a welcome recognition of their role in national development. But better economic opportunity does not always mean better work, and high rates of economic growth do not always result in urban poverty reduction. Rising urban inequality is a major concern, with the urban poor vulnerable to national growth downturns, and affected disproportionately by macro-economic reforms. Most of them spend their lives in insecure, poorly paid jobs. This Briefing Paper examines the benefits and constraints of urbanisation from the  labour market perspective, and offers a series of policy ‘next steps’ for municipal governments, including pro-poor urbanisation, backed by labour intensive growth, labour protection, flexible land use regulation and investments in basic services.