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Rural Roads and Local Economic Development

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  • Sam Asher
  • Paul Novosad

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.

Suggested Citation

  • Sam Asher & Paul Novosad, 2020. "Rural Roads and Local Economic Development," American Economic Review, American Economic Association, vol. 110(3), pages 797-823, March.
    • Handle: RePEc:aea:aecrev:v:110:y:2020:i:3:p:797-823
    DOI: 10.1257/aer.20180268
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

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