Journal of Political Economy · 2025 · Pedro Cavalcanti Ferreira、Alexander Monge‐Naranjo、Luciene Torres de Mello Pereira
Abstract
We study the emergence and persistence of urban slums in Brazil. Using data on labor markets, housing costs, and access to education, we construct a quantitative model to explore the impact of slums on the country s human capital and structural transformation. Urban slums emerge and persist due to their dual roles as intergenerational stepping stones for low-educated households and as blockades for higher-educated ones. Providing slum children access to schools in formal urban areas would have led to larger but shorter-lived slums. Improved rural schools, if available earlier during urbanization, would have vastly prevented the formation of urban slums.