Slums and Pandemics

57 Pages Posted: 18 Aug 2020

See all articles by Luiz Brotherhood

Luiz Brotherhood

University of Barcelona; University of Barcelona - Barcelona Economic Analysis Team (BEAT)

Tiago Cavalcanti

University of Cambridge

Daniel Da Mata

Getulio Vargas Foundation (FGV) - Sao Paulo School of Economics

Cezar Santos

Getulio Vargas Foundation (FGV) - FGV/EPGE Escola Brasileira de Economia e Finanças

Multiple version iconThere are 2 versions of this paper

Date Written: August 1, 2020

Abstract

This paper studies the role of slums in shaping the economic and health dynamics of pandemics. Using data from millions of mobile phones in Brazil, an event-study analysis shows that residents of overcrowded slums engaged in less social distancing after the outbreak of COVID-19. We develop a choice-theoretic equilibrium model in which poorer agents live in high-density slums and others do not. The model is calibrated to Rio de Janeiro. Slum dwellers account for a disproportionately high number of infections and deaths. In a counterfactual scenario without slums, deaths fall overall but increase in non-slum neighborhoods. Policy simulations indicate that: reallocating medical resources cuts deaths and raises output and the welfare of both groups; mild lockdowns favor slum individuals by mitigating the demand for hospital beds whereas strict confinements mostly delay the evolution of the pandemic; and cash transfers benefit slum residents in detriment of others, highlighting important distributional effects.

Keywords: COVID-19, health, Public Policies, Slums, Social distancing

JEL Classification: C63, D62, E17, I10, I18, O18

Suggested Citation

Brotherhood, Luiz and Cavalcanti, Tiago and Da Mata, Daniel and Santos, Cezar, Slums and Pandemics (August 1, 2020). CEPR Discussion Paper No. DP15131, Available at SSRN: https://ssrn.com/abstract=3674908

Luiz Brotherhood (Contact Author)

University of Barcelona

University of Barcelona - Barcelona Economic Analysis Team (BEAT) ( email )

Gran Via de les Corts Catalanes
Barcelona, 08007
Spain

Tiago Cavalcanti

University of Cambridge ( email )

Trinity Ln
Cambridge, CB2 1TN
United Kingdom

Daniel Da Mata

Getulio Vargas Foundation (FGV) - Sao Paulo School of Economics ( email )

Rua Itapeva 474
São Paulo, São Paulo 01332-000
Brazil

Cezar Santos

Getulio Vargas Foundation (FGV) - FGV/EPGE Escola Brasileira de Economia e Finanças ( email )

Praia de Botafogo 190/1125, CEP
Rio de Janeiro RJ 22253-900
Brazil

HOME PAGE: http://sites.google.com/site/czrsantos

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