Funded by Weiss Fund for Research in Development Economics, University Research Priority Program Equality of Opportunity, Swiss Re Fund for Development Economics and Zurich GSE Director's Grant
Funded by Weiss Fund for Research in Development Economics, University Research Priority Program Equality of Opportunity, Swiss Re Fund for Development Economics and Zurich GSE Director's Grant
Abstract. Slum redevelopment policies are widely used to curb slum growth and regenerate urban neighbourhoods. I study the short- and medium-term effects of slum clearance and redevelopment on incumbent slum residents in Mumbai by assembling a novel residential mobility panel that tracks all 12 million residents of the city over 15 years by digitising and matching electoral roll records. Exploiting variation in the timing of redevelopment approvals across slums, I use a staggered difference-in-differences design to estimate these effects. Slum residents who are entitled to in-situ compensation — ownership of an apartment in the redeveloped neighbourhood — are persistently displaced from the neighbourhood. Redevelopment increases the probability of living in formal housing by 6 p.p., but the effect on the probability of living in other slums is four times as large, shifting slum residents across slum neighbourhoods more than out of slum living. Using digitised project records and high-resolution daytime satellite data, I document substantial non-completion after slum clearance and large lags between slum clearance and completion of units for slum residents. A key feature of the policy design is the timing mismatch between displacement and compensation: residents are cleared before receiving replacement housing, which is delivered only when units are built on the cleared site. Transitions out of slum living are 250% larger in completed than incomplete projects and largest where completion occurs soon after clearance. These results suggest that while slum redevelopments succeed in redeveloping the targeted site, the resulting displacement of incumbent residents to slums elsewhere can undermine the broader goal of curbing slum growth in the city.