Discrimination Against Workers From Slums: What Is its Extent, What Explains It, and How Do We Tackle It?
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Nearly 120 million people reside in urban slums in Latin America and the Caribbean, where precarious housing and socioeconomic circumstances testify to deep inequality. This paper investigates whether labor market discrimination influences the realities of fewer formal jobs and lower wages with which slum dwellers contend. We implemented a field experiment in Buenos Aires, Argentina, in which we hired human resource recruiters and tasked them with evaluating several pairs of similarly productive job applicants. Out of every 10 applicants, the recruiters chose slum dwellers 4.2 times and other applicants 5.8 times. They also evaluated slum dwellers as less fit for the vacancies and offered them lower wages (nearly 2 percent lower). An intervention showed recruiters the discrimination rate in Buenos Aires, after which they began favoring slum dwellers.