The Allegory of the Favela: The Multifaceted Effects of Socioeconomic Mobility

What are the consequences of upward socioeconomic mobility for disenfranchised individuals? This article examines this question in the context of a business training program offered to residents of Brazilian urban slums, known as “favelas.” The study employs a randomized controlled trial complemented by quantile regressions, field visits, and interviews. The results show that training improves favela dwellers’ economic outcomes, such as by increasing income and participation in entrepreneurship, and some socio-psychological outcomes, such as by improving self-efficacy and optimism. However, these income improvements were accompanied by participants’ enhanced experiences of favela stigma, an adverse socio-psychological outcome related to their residential segregation. Both quantitative and qualitative findings demonstrate the multifaceted nature of socioeconomic mobility, through which favela dwellers who prosper economically become more exposed to prejudice from people living outside favelas. The study illustrates, through the “allegory of the favela,” the bittersweet process of socioeconomic mobility. This abductive research contributes to the literature by showing that while interventions designed to enfranchise individuals may effectively achieve economic inclusion in terms of income gains, they may simultaneously lead participants into discriminatory systems that further stigmatize people based on the same characteristics of their prior exclusion.