 Slums, allocation of talent, and barriers to urbanizationEuropean Economic Review, 2021, vol. 140, issue C Abstract: Slums are a prevalent urban phenomenon in developing countries. They are locations with low-quality dwellings, often built on valuable land, that allow poorer households to access urban markets that otherwise would be unattainable. I build a spatial general equilibrium framework to analyze the aggregate effects of urban policies in India. The model takes into account individual selection and location differences in returns to education, productivity, and housing rents. I find that demolishing slums in the most productive areas decreases the urban population, with negative effects on welfare and no gains in labor productivity. In contrast, eliminating formal housing distortions increases the urban population while decreasing the presence of slums by a significant amount. It also increases welfare and labor productivity by 6.8 and 1.3 percent, respectively. Keywords: Slums; Urbanization; Productivity; Migration; Human capital (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:140:y:2021:i:c:s0014292121002166 DOI: 10.1016/j.euroecorev.2021.103908 Access Statistics for this article European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer More articles in European Economic Review from Elsevier |
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