• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

G²LM|LIC

  • About
    • History
    • Investigators
    • Team
  • Projects
    • GLM|LIC
      • Agricultural Labour Markets
      • Gender and Employment
      • Labour Markets in Low-Income Countries
      • Migration
      • Skill Training
    • G²LM|LIC
      • Fact & Policy
      • Fertility & Labour markets
      • Barriers to gender parity
      • The Future of Work
      • Policies & Welfare
    • COVID-19
  • Publications
    • Policy Briefs
    • Synthesis Papers
    • Working Papers
    • Published Articles
    • Book
    • Datasets
  • Events
  • Evidence Finder
  • Jobs of the World

Rural Roads and Local Economic Development

A GLM|LIC research project conducted by economists Sam Asher (World Bank) and Paul Novosad (Dartmouth College) evaluates the impacts of India’s $40 billion national rural road construction program (PMGSY) on village labour and goods markets.

Prior research suggested that road infrastructure benefited rural economies in a broad range of ways, but few of these studies were able to decisively address the question of causality, due to the endogeneity of road placement. The high costs and potentially large benefits of infrastructure investments mean that the placement of new roads is typically correlated with both economic and political characteristics of locations. This potentially biases prior estimates. GLM|LIC researchers overcame this challenge by taking advantage of an implementation rule that targeted roads to villages with population exceeding certain thresholds, causing villages just above the population threshold to be 22 percentage points more likely to receive a road.

They found no evidence that roads affected agriculture investment or production or household consumption. They do observe a substantial labour market reallocation: the num­ber of individuals working in agriculture declines substantially. However, employment in village non-farm establishments ex­pands only slightly, suggesting that people are using the roads to access wage markets outside of the village. Their results make clear that transportation infrastructure alone is not going to lead to thriving villages. More likely, remote villages are poor places both for agriculture and for non-farm work, and development is best facilitated by making it easier for people to access external labour markets.

Read more about the GLM|LIC project and the Policy Brief No. 30 “Rural Roads and Local Economic Development”.

Filed Under: Uncategorized

Previous Post: « Wage Growth and Social Security Reform
Next Post: G²LM|LIC »

Primary Sidebar

COVID-19

News from our Twitter Account

  • In a new @GLMLIC #PolicyBrief, @nihasingh06 and @SharvariRavish1 explore how access to information about local labo… https://t.co/9BCssO5vD0 January 25, 2023 1:30 pm
  • Watch here the Programme Coordinator of the G²LM|LIC Programme, Prof. @orianabandiera, discussing poverty traps, la… https://t.co/Aqht7PPkRI January 10, 2023 1:28 pm
  • In a new @GLMLIC #Policy Brief, @KateVyborny, @farrukh_aiman, @Khan93Lala, @theFstat, and @HarmalahK explore the g… https://t.co/5mpqxLGp5n December 14, 2022 1:30 pm
Twitter

Footer

IZA Logo

Established in 1998 in Bonn, Germany, IZA is an independent, non-profit research institution supported by the Deutsche Post Foundation with a focus on the analysis of global labour markets. It operates an international network of about 1,500 economists and researchers spanning across more than 50 countries.

Based on academic excellence and an ambitious publication strategy, IZA serves as a place of communication between academic science and political practice.

DFID Logo

The Foreign, Commonwealth & Development Office (FCDO) leads the UK's work to end extreme poverty. We're ending the need for aid by creating jobs, unlocking the potential of girls and women, and helping to save lives when humanitarian emergencies hit.

FCDO is a ministerial department, supported by 12 agencies and public bodies.

© 2012–2023 | IZA – Institute of Labor Economics | Code of Conduct | Imprint