Slums and Pandemics
55 Pages Posted: 5 Aug 2020 Last revised: 28 Oct 2020
Date Written: August 2, 2020
How do slums shape the economic and health dynamics of pandemics? An event-study analysis using millions of mobile phones in Brazil shows that residents of overcrowded slums engaged in less social distancing after the outbreak of COVID-19. We develop and calibrate a choice-theoretic equilibrium model in which individuals are heterogeneous in income and some people live in high-density slums. Slum residents account for a disproportionately high number of infections and deaths and, without slums, deaths increase in non-slum neighborhoods. Policy analysis of reallocation of medical resources, lockdowns and cash transfers produce heterogeneous effects across groups.
Keywords: COVID-19, Slums, Health, Social Distancing, Public Policies
JEL Classification: E17, I10, I18, D62, O18, C63
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