Macro-JI Seminar - Alexander Monge-Naranjo (European University Institute)

Title: Of Cities and Slums

Abstract:

We examine the emergence and consequences of urban slums along a country’s path to
urbanization. Based on salient evidence from Brazilian labor, housing, and education markets,
we study the interaction of slums with structural transformation and inequality. Urban slums
are an intergenerational stepping-stone only for the lowest educated, explaining their emergence
and persistence over time. In the past slums might have helped with Brazil’s human capital
formation but at least since 2010 slums are a hindrance. Countries that missed the opportunity
to improve rural schools and avoid the formation of slums should target improving schools in
the slums.