Why Slums Persist

Apr 25 , 2026
By Luciene Pereira

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The standard policy response to slums (relocate people, bulldoze the settlement, and build public housing elsewhere) is older than the slums themselves. It has never worked.

The logic seems straightforward. Slums are viewed as unsanitary, unsafe, and visually jarring. Those who want to build a modern, orderly city want to remove them. But people do not live in slums by choice. They do so because there are no affordable alternatives near their jobs and essential services. Destroying their homes without addressing the conditions that drove them there merely shifts the problem to a different, often worse, place.

Experience bears this out. In 1968 and 1975, Brazil's military government launched an aggressive slum-demolition campaign in Rio de Janeiro, forcing nearly 50,000 families into housing projects on the city's periphery. The residents of Catacumba favela, which housed nearly 15,000 people on prime real estate in Lagoa before its destruction in 1970, experienced a decline in household income, higher commuting costs, and reduced access to jobs following their relocation. Meanwhile, the overall favela population continued to grow.

A similar pattern has been documented in Addis Abeba, Lagos, and Mumbai, with slums eliminated in one place only to reappear elsewhere, often nearby. Even after eradication was abandoned as an official policy, as in Brazil, new informal settlements continued to emerge.

In new research, my co-authors, Pedro Cavalcanti and Alexander Monge-Naranjo, and I examine the emergence and persistence of slums in Brazil using detailed data on labour markets, housing, and education. We find that slums are not simple poverty traps. Under the right conditions, they can also be stepping stones.

For families with very low levels of education, slums can provide an entry point into urban economic life. Compared to rural areas, they offer better access to jobs and schools. But the quality of those schools remains poor, so as households accumulate education, the slum becomes a constraint. Put simply, slums can help households get onto the first rungs of the economic ladder but prevent them from climbing higher.

While some households manage to improve their economic circumstances enough to leave the slums, many, often those with intermediate levels of education, do not. And there are always more low-educated rural households moving in, often motivated by the desire to improve their children's educational prospects. In fact, our research shows that schooling plays a key role in slum formation. Households with low years of schooling want their children to have better lives, but cannot afford to live in cities.

These findings help to explain why slums persist despite the economic opportunities they provide. They are not static communities. Slums are dynamic systems that are continuously renewed. Instead of attempting to eliminate slums through demolition and forced relocation - a recipe for failure - policymakers should address the deeper mismatches between job proximity, housing affordability, and access to quality education.

Improving schools within slums is essential, though it might attract new migrants, causing slums to grow. Countries in earlier stages of development, where most people live in rural areas, should thus place a high priority on improving rural schools so that migration to cities reflects opportunity rather than desperation. Better-prepared migrants are more likely to enter formal housing markets rather than informal settlements.

As urbanisation progresses, the emphasis should shift toward integrating slum residents into the formal economy, especially by ensuring their children have access to higher-quality schools. Such policies should be sustained across generations to enable households to build sufficient human capital to achieve upward mobility and break the cycle of informality.

But education is only the first step. If formal urban housing remains prohibitively expensive, even upwardly mobile families will struggle to leave slums behind. Because the market does not supply affordable housing where it is needed, and long daily commutes are unrealistic, governments have to intervene with a coherent strategy that accounts for both education and housing.

Slums persist not because they are desirable, but because they are necessary. As long as people lack better options, they will continue to flourish. The task for policymakers is not to eliminate slums by diktat, but to make them obsolete over time by promoting the educational opportunities and spatial integration their residents need.

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PUBLISHED ON Apr 25,2026 [ VOL 27 , NO 1356]

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