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Of Cities and Slums

Pedro Ferreira (), Alexander Monge-Naranjo and Luciene Torres de Mello Pereira
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Luciene Torres de Mello Pereira: EPGE/FGV, Rio de Janeiro

No 2016-22, Working Papers from Federal Reserve Bank of St. Louis

Abstract: The emergence of slums is a common feature in a country's path towards urbanization, structural transformation and development. Based on salient micro and macro evidence of Brazilian labor, housing and education markets, we construct a simple model to examine the conditions for slums to emerge. We then use the model to examine whether slums are barriers or stepping stones for lower skilled households and for the development of the country as a whole. We calibrate our model to explore the dynamic interaction between skill formation, income inequality and structural transformation with the rise (and potential fall) of slums in Brazil. We then conduct policy counterfactuals. For instance, we find that cracking down on slums could slow down the acquisition of human capital, the growth of cities (outside slums) and non-agricultural employment. The impact of reducing housing barriers to entry into cities and of different forms of school integration between the city and the slums is also explored.

Keywords: Skill formation; Locations; Occupations; Structural transformation (search for similar items in EconPapers)
JEL-codes: O15 O18 R23 R31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo, nep-lam and nep-ure
Date: 2016-10-01
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https://research.stlouisfed.org/wp/2016/2016-022.pdf Full text (application/pdf)
http://dx.doi.org/10.20955/wp.2016.022 http://dx.doi.org/10.20955/wp.2016.022 (application/pdf)

Related works:
Working Paper: Of Cities and Slums (2018) Downloads
Working Paper: Of Cities and Slums (2017) Downloads
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DOI: 10.20955/wp.2016.022

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