IZA DP No. 10639: Legal Status and Deprivation in India's Urban Slums: An Analysis of Two Decades of National Sample Survey Data
In India, 52–98 million people live in urban slums, and 59% of slums are "non-notified" or lack legal recognition by the government. In this paper, we use data on 2,901 slums from four waves of the National Sample Survey (NSS) spanning almost 20 years to test the hypothesis that non-notified status is associated with greater deprivation in access to basic services, thereby increasing vulnerability to poor health outcomes. To quantify deprivation for each slum, we construct a basic services deprivation score (BSDS), which includes variables that affect health, such as access to piped water, latrines, solid waste disposal, schools, and health centers. In a regression analysis, we find a robust association between non-notified status and greater deprivation after controlling for other variables. Our analysis reveals a progressive reduction in deprivation the longer a slum has been notified. In addition, data from the 2012 NSS show that, despite suffering from greater deprivation, non-notified slums were much less likely to receive financial aid from government slum improvement schemes. Our findings suggest that legally recognizing non-notified slums and targeting government aid to these settlements may be crucial for improving health outcomes and diminishing urban disparities.