Folklore, Legend, and Mythology; Parable; Literary Fiction
Steinbeck based The Pearl in part on a legend he heard during a six-week expedition in the Sea of Cortez. Elements of the story, then, have been passed down as part of folklore—which means the novella itself belongs to that tradition.
We call it a "parable" because the story is fairly simple in nature (man finds pearl; pearl destroys man) but illustrates a larger, moralistic truth (greed will corrupt and destroy all that is good in the world).
What’s interesting is Steinbeck’s twist on this classic parable in the light of a more modern topic—the American Dream—which means his tale is not only parable for the ages, but a parable for our particular age.