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Do rural roads create pathways out of poverty? Evidence from India

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  • Aggarwal, Shilpa

Abstract

Nearly a third of the world's rural population does not live near a paved road, and it is widely believed that this limits their access to economic opportunities. Using a natural experiment that led to plausibly exogenous variation in the timing and placement of paved roads in Indian villages, this paper provides evidence on the impact of roads on a wide variety of economic outcomes in rural areas. I find evidence consistent with 5 main effects in the village economy. Households in treatment areas report (a) lower prices and (b) increased availability of non-local goods, suggesting greater market integration. Reduced-form evidence suggests that changes in market access caused rural households to (c) increase the use of agricultural technologies, and (d) pull teenaged members out of school to join the labor force. Finally, evidence points to (e) enrollment gains for younger children.

Suggested Citation

  • Aggarwal, Shilpa, 2018. "Do rural roads create pathways out of poverty? Evidence from India," Journal of Development Economics, Elsevier, vol. 133(C), pages 375-395.
    • Handle: RePEc:eee:deveco:v:133:y:2018:i:c:p:375-395
    DOI: 10.1016/j.jdeveco.2018.01.004
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    More about this item

    Keywords

    Roads; Market integration; Technology adoption; School enrollment; Consumption variety;
    All these keywords.

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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