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  3. American Economic Review
  4. March 2020
  5. Rural Roads and Local Economic Development

Rural Roads and Local Economic Development

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Abstract

Nearly one billion people worldwide live in rural areas without access to national paved road networks. We estimate the impacts of India's 40 billion USD national rural road construction program using a fuzzy regression discontinuity design and comprehensive household and firm census microdata. Four years after road construction, the main effect of new feeder roads is to facilitate the movement of workers out of agriculture. However, there are no major changes in agricultural outcomes, income, or assets. Employment in village firms expands only slightly. Even with better market connections, remote areas may continue to lack economic opportunities.

Citation

Asher, Sam, and Paul Novosad. 2020. "Rural Roads and Local Economic Development." American Economic Review, 110 (3): 797-823. DOI: 10.1257/aer.20180268

Additional Materials

JEL Classification

  • J43 Agricultural Labor Markets
  • O13 Economic Development: Agriculture; Natural Resources; Energy; Environment; Other Primary Products
  • O18 Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
  • R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
  • R42 Transportation Economics: Government and Private Investment Analysis; Road Maintenance, Transportation Planning