CEU Economic Seminar Series: Of Cities and Slums

with: Pedro Cavalcanti Ferreiraz and Luciene Torres de Mello Pereira

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.