I noticed this earlier in my Pergamon game. It might be a feature of the City Mod, but I think it's the RTW engine in general. In my capital, whenever I recruit a unit, the squalor level drops by 5%.

I'm at the ceiling population (hovering at around 11,000) if that makes any difference. Just never noticed this before. I can understand the logic of it, fewer people means less over-crowding, just hadn't seen it happen.

Doesn't seem to work anywhere else, maybe it's because of the size? Or because it's the capital?