Cities as Engines of Opportunities: Evidence from Brazil

Radu Barza, Edward Glaeser, Cesar Hidalgo and Martina Viarengo

No 32426, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Are developing-world cities engines of opportunities for low-wage earners? In this study, we track a cohort of young low-income workers in Brazil for thirteen years to explore the contribution of factors such as industrial structure and skill segregation on upward income mobility. We find that cities in the south of Brazil are more effective engines of upward mobility than cities in the north and that these differences appear to be primarily related to the exposure of unskilled workers to skilled co-workers, which in turn reflects industry composition and complexity. Our results suggest that the positive effects of urbanization depend on the skilled and unskilled working together, a form of integration that is more prevalent in the cities of southern Brazil than in northern cities. This segregation, which can decline with specialization and the division of labor, may hinder the ability of Brazil's northern cities to offer more opportunities for escaping poverty.

JEL-codes: D63 I24 N90 N96 O10 O11 O18 O43 R10 R23 (search for similar items in EconPapers)
Date: 2024-05
New Economics Papers: this item is included in nep-lam, nep-lma and nep-ure
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Working Paper: Cities as Engines of Opportunities: Evidence from Brazil (2024)
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