🏠 The homes
Homes are small, often one room for a whole family. They are built from cheap materials such as brick, tin sheets, plastic and wood, packed tightly along narrow lanes.
Urban Challenges » Squatter Settlements and the Informal Economy
What you'll learn this session
Study time: 30 minutes
Edexcel spec: 6.2 Cities face a range of social and environmental challenges resulting from rapid growth and resource demands (c)
- The challenges of a named city in a developing or emerging country, using Mumbai in India
- What squatter settlements are, why they grow and what living in one is like
- What the informal economy is, with its benefits and problems
- How to use a named case study in an exam answer
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Unlock This CourseA developing-city case study: Mumbai
You must know the urban challenges of one named city in a developing or emerging country. In this lesson the example is Mumbai in India. India is an emerging country, with a fast-growing economy but many people who are still poor. Mumbai is one of its largest cities and a major centre for business, film-making and trade. About 12 million people live in the city itself, and more than 20 million live in the whole urban area around it.
People keep arriving from villages across India to look for work. The city has grown faster than it can build homes, roads and jobs. This lesson looks at two linked challenges: squatter settlements and the informal economy. The next lesson, Pollution and Quality of Life in a Developing City, covers the other two.
Key terms:
- Squatter settlement: an area of housing, built without planning permission, on land that the people living there do not own or rent legally.
- Informal economy: jobs and businesses that are not registered with the government, so the workers pay no tax and have no contract.
- Formal economy: registered jobs and businesses, with contracts, regular pay, tax and legal protection.
Squatter settlements
Squatter settlements are found in cities all over the developing world. They have different local names: favelas in Brazil, slums or shanty towns in many other countries. In Mumbai, roughly four in every ten people live in informal housing of this kind.
Why do they grow?
- Migrants arrive faster than the city can build homes.
- Migrants and poor families cannot afford legal housing, because land values in the city are very high.
- Land is scarce, so people build on any empty land they can find, such as steep slopes or the edges of railways, rivers and drains.
- Once a settlement is there, relatives and friends from the same village follow and settle nearby.
Case study: Dharavi
Dharavi is Mumbai's best-known squatter settlement. It sits in the middle of the city, close to the business districts, on land that is now very valuable. It covers only about two square kilometres, yet estimates of the number of people living there run from several hundred thousand to around a million. That makes it one of the most crowded places on Earth.
Life in a squatter settlement
💧 Water and sanitation
Many homes have no private tap or toilet. People queue at shared taps and share toilets, and dirty water and waste can collect in open drains.
🏥 Health
Overcrowding and dirty water help diseases spread quickly. Fires and flooding in the monsoon rains are also dangers.
🔒 No legal rights
Families without legal ownership can be moved on or have their homes knocked down. Services may be slow to improve in an area that is not officially recognised.
It is not all bad. Settlements like Dharavi often have a strong community spirit, with neighbours helping each other. Homes are close to jobs, so people can walk to work and save money on transport. Many families slowly improve their homes over the years.
The informal economy
Most of the jobs in a squatter settlement are in the informal economy. Informal workers are not registered. They are usually paid cash, often by the day. They have no contract, no sick pay and no safety rules, and they pay no tax.
Examples in Mumbai and Dharavi
- Street vendors selling fruit, snacks and tea from carts and pavements.
- Waste pickers who collect plastic, paper and metal to sell on.
- Small recycling workshops that sort and reprocess plastic and metal. Dharavi has many of these.
- Small workshops making leather goods, pottery and clothes.
- Domestic workers, rickshaw drivers and building labourers.
✅ Benefits
It gives work and an income to people who cannot find formal jobs. It needs little money or training to start. Recycling saves resources and keeps waste out of the city's rubbish tips.
❌ Problems
Pay is low and uncertain. Hours are long and conditions can be dangerous, for example handling waste or chemicals without protection. Children may have to work. The government collects no tax, so there is less money to spend on services.
Informal work and squatter settlements are linked. Low, uncertain pay is one reason families cannot afford legal housing, so they stay in the settlement. At the same time, the settlement provides a ready supply of cheap workers and a place to run a small business from home.
Using your case study
Examiners reward named detail. Instead of "slums have bad conditions", write "In Dharavi in Mumbai, many homes have no private toilet and share taps". Name the city and the settlement, then give one or two specific facts.
Common mistakes
- Saying that people in squatter settlements have no jobs. Most do work, but in the informal economy with low and uncertain pay.
- Thinking that "informal" means illegal crime. It means unregistered work, such as street selling or small workshops.
- Describing only the bad points. Strong answers also mention community spirit, work close to home and the jobs the settlement provides.
- Mixing up cities. Use one named developing or emerging city for the whole case study.
Exam-style question
(a) State what is meant by the informal economy. [1 mark]
(b) For a named city in a developing or emerging country, explain why squatter settlements have grown. [3 marks]
(c) Describe two problems of living in a squatter settlement in your named city. [2 marks]
Model answer
(a) Jobs and businesses that are not registered with the government, so workers pay no tax and have no contract. (1)
(b) In Mumbai, migrants from villages have arrived faster than the city can build homes. (1) Land in the city is very expensive, so poor families cannot afford legal housing. (1) They build homes on any empty land they can find, such as in Dharavi, and relatives follow them there. (1)
(c) In Dharavi, many homes have no private toilet or tap, so people share and queue for water. (1) The settlement is very overcrowded, so diseases spread quickly. (1)
Exam tip
In a "named city" question, put the city or settlement name in your answer at least once, and link each point to a reason with the word "because" or "so".