IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v39y2011i12p2232-2244.html
   My bibliography  Save this article

Are Schooling and Roads Complementary? Evidence from Income Dynamics in Rural Indonesia

Author

Listed:
  • Yamauchi, Futoshi
  • Muto, Megumi
  • Chowdhury, Shyamal
  • Dewina, Reno
  • Sumaryanto, Sony

Abstract

We examine the impact of spatial connectivity on household income growth and non-agriculture labor supply in Indonesia by combining household panel data and village census data during the period of 1995–2007. Our empirical results show that the impacts of improved local road quality on income growth and the transition to non-agricultural labor markets depend on household education and distance to economic centers. In particular, post-primary education significantly increases the benefit from the improvement of local spatial connectivity in remote areas, promoting labor transition to non-agricultural sectors. Education and local road quality are complementary, mutually increasing non-agricultural labor supply and income in remote areas. In contrast, the initial landholding size does not affect the benefit from improved road quality.

Suggested Citation

  • Yamauchi, Futoshi & Muto, Megumi & Chowdhury, Shyamal & Dewina, Reno & Sumaryanto, Sony, 2011. "Are Schooling and Roads Complementary? Evidence from Income Dynamics in Rural Indonesia," World Development, Elsevier, vol. 39(12), pages 2232-2244.
    • Handle: RePEc:eee:wdevel:v:39:y:2011:i:12:p:2232-2244
    DOI: 10.1016/j.worlddev.2011.04.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305750X11000738
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.worlddev.2011.04.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Joseph E. Stiglitz, 1974. "Alternative Theories of Wage Determination and Unemployment in LDC's: The Labor Turnover Model," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 88(2), pages 194-227.
    2. Fafchamps, Marcel & Wahba, Jackline, 2006. "Child labor, urban proximity, and household composition," Journal of Development Economics, Elsevier, vol. 79(2), pages 374-397, April.
    3. Yamauchi, Futoshi, 2004. "Are experience and schooling complementary? Evidence from migrants' assimilation in the Bangkok labor market," Journal of Development Economics, Elsevier, vol. 74(2), pages 489-513, August.
    4. Stiglitz, Joseph E, 1976. "The Efficiency Wage Hypothesis, Surplus Labour, and the Distribution of Income in L.D.C.s," Oxford Economic Papers, Oxford University Press, vol. 28(2), pages 185-207, July.
    5. Dewina, Reno & Yamauchi, Futoshi, 2010. "Human Capital, Mobility, and Income Dynamics: Evidence from Indonesia," Working Papers 11, JICA Research Institute.
    6. Marcel Fafchamps & Forhad Shilpi, 2003. "The spatial division of labour in Nepal," Journal of Development Studies, Taylor & Francis Journals, vol. 39(6), pages 23-66.
    7. David Alan Aschauer, 1989. "Back of the G-7 pack: public investment and productivity growth in the Group of Seven," Working Paper Series, Macroeconomic Issues 89-13, Federal Reserve Bank of Chicago.
    8. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    9. Jonna P. Estudillo & Yasuyuki Sawada & Keijiro Otsuka, 2006. "The Green Revolution, development of labor markets, and poverty reduction in the rural Philippines, 1985–2004," Agricultural Economics, International Association of Agricultural Economists, vol. 35(s3), pages 399-407, November.
    10. World Bank, 2003. "World Development Indicators 2003," World Bank Publications - Books, The World Bank Group, number 13920.
    11. Rosenzweig, Mark R, 1995. "Why Are There Returns to Schooling?," American Economic Review, American Economic Association, vol. 85(2), pages 153-158, May.
    12. Morrison, Catherine J & Schwartz, Amy Ellen, 1996. "State Infrastructure and Productive Performance," American Economic Review, American Economic Association, vol. 86(5), pages 1095-1111, December.
    13. Fan, Shenggen & Zhang, Linxiu & Zhang, Xiaobo, 2004. "Reforms, Investment, and Poverty in Rural China," Economic Development and Cultural Change, University of Chicago Press, vol. 52(2), pages 395-421, January.
    14. Amartya K. Sen, 1966. "Peasants and Dualism with or without Surplus Labor," Journal of Political Economy, University of Chicago Press, vol. 74(5), pages 425-425.
    15. Binswanger, Hans P. & Khandker, Shahidur R. & Rosenzweig, Mark R., 1993. "How infrastructure and financial institutions affect agricultural output and investment in India," Journal of Development Economics, Elsevier, vol. 41(2), pages 337-366, August.
    16. Benjamin, Dwayne, 1992. "Household Composition, Labor Markets, and Labor Demand: Testing for Separation in Agricultural Household Models," Econometrica, Econometric Society, vol. 60(2), pages 287-322, March.
    17. Minten, Bart & Kyle, Steven, 1999. "The effect of distance and road quality on food collection, marketing margins, and traders' wages: evidence from the former Zaire," Journal of Development Economics, Elsevier, vol. 60(2), pages 467-495, December.
    18. Yoko Kijima & Tomoya Matsumoto & Takashi Yamano, 2006. "Nonfarm employment, agricultural shocks, and poverty dynamics: evidence from rural Uganda," Agricultural Economics, International Association of Agricultural Economists, vol. 35(s3), pages 459-467, November.
    19. Tomoya Matsumoto & Yoko Kijima & Takashi Yamano, 2006. "The role of local nonfarm activities and migration in reducing poverty: evidence from Ethiopia, Kenya, and Uganda," Agricultural Economics, International Association of Agricultural Economists, vol. 35(s3), pages 449-458, November.
    20. Schultz, Theodore W, 1975. "The Value of the Ability to Deal with Disequilibria," Journal of Economic Literature, American Economic Association, vol. 13(3), pages 827-846, September.
    21. Marcel Fafchamps & Forhad Shilpi, 2005. "Cities and Specialisation: Evidence from South Asia," Economic Journal, Royal Economic Society, vol. 115(503), pages 477-504, April.
    22. Jacoby, Hanan C, 2000. "Access to Markets and the Benefits of Rural Roads," Economic Journal, Royal Economic Society, vol. 110(465), pages 713-737, July.
    23. Fafchamps, Marcel, 1993. "Sequential Labor Decisions under Uncertainty: An Estimable Household Model of West-African Farmers," Econometrica, Econometric Society, vol. 61(5), pages 1173-1197, September.
    24. Mark R. Rosenzweig, 1980. "Neoclassical Theory and the Optimizing Peasant: An Econometric Analysis of Market Family Labor Supply in a Developing Country," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(1), pages 31-55.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yamauchi, Futoshi, 2015. "Wage Growth, Landholding and Mechanization in Agriculture," 2015 Conference, August 9-14, 2015, Milan, Italy 212611, International Association of Agricultural Economists.
    2. Yasuharu Shimamura & Satoshi Shimizutani & Eiji Yamada & Hiroyuki Yamada, 2023. "On the inclusiveness of rural road improvement: Evidence from Morocco," Review of Development Economics, Wiley Blackwell, vol. 27(3), pages 1721-1745, August.
    3. Liu, Yanyan & Yamauchi, Futoshi, 2013. "Population density, migration, and the returns to human capital and land: Highlights from Indonesia," IFPRI discussion papers 1271, International Food Policy Research Institute (IFPRI).
    4. Futoshi Yamauchi, 2016. "The Effects of Improved Roads on Wages and Employment: Evidence from Rural Labour Markets in Indonesia," Journal of Development Studies, Taylor & Francis Journals, vol. 52(7), pages 1046-1061, July.
    5. Yamauchi, Futoshi & Dewina, Reno, 2012. "Risks and spatial connectivity evidence from food price crisis in rural Indonesia," Food Policy, Elsevier, vol. 37(4), pages 383-389.
    6. Yamauchi, Futoshi, 2016. "Rising real wages, mechanization and growing advantage of large farms: Evidence from Indonesia," Food Policy, Elsevier, vol. 58(C), pages 62-69.
    7. Yasuharu Shimamura & Satoshi Shimizutani & Eiji Yamada & Hiroyuki Yamada, 2023. "The Gendered Impact of Rural Road Improvement on Schooling Decisions and Youth Employment in Morocco," Journal of Development Studies, Taylor & Francis Journals, vol. 59(3), pages 413-429, March.
    8. Wouter Zant, 2018. "Trains, Trade, and Transaction Costs: How Does Domestic Trade by Rail Affect Market Prices of Malawi Agricultural Commodities?," The World Bank Economic Review, World Bank, vol. 32(2), pages 334-356.
    9. Yamauchi, Futoshi, 2014. "Wage growth, landholding, and mechanization in agriculture : evidence from Indonesia," Policy Research Working Paper Series 6789, The World Bank.
    10. Yamauchi, Futoshi, 2014. "Roads, labor markets, and human capital : evidence from rural Indonesia," Policy Research Working Paper Series 7139, The World Bank.
    11. Pierre-Richard Agénor & Baris Alpaslan, 2013. "Child Labor, Intra-Household Bargaining and Economic Growth," Centre for Growth and Business Cycle Research Discussion Paper Series 181, Economics, The University of Manchester.
    12. Chamberlin, Jordan & Jayne, T.S., 2013. "Unpacking the Meaning of ‘Market Access’: Evidence from Rural Kenya," World Development, Elsevier, vol. 41(C), pages 245-264.
    13. Ivo Bischoff & Ferry Prasetyia, 2015. "Determinants of local public expenditures on education: empirical evidence for Indonesian districts between 2005 and 2012," MAGKS Papers on Economics 201532, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    14. Liu, Yanyan & Yamauchi, Futoshi, 2014. "Population density, migration, and the returns to human capital and land: Insights from Indonesia," Food Policy, Elsevier, vol. 48(C), pages 182-193.
    15. Yamauchi, Futoshi, 2012. "Long-term Impacts of Rice Price and Production Seasonality on Human Capital: Evidence from Rural Indonesia," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126163, International Association of Agricultural Economists.
    16. Miyazaki, Suguru & Shimamura, Yasuharu, 2014. "Risk, Infrastructure, and Rural Market Integration: Implications of Infrastructure Provision for Food Markets and Household Consumption in Rural Indonesia," Working Papers 81, JICA Research Institute.
    17. Suchi Kapoor Malhotra & Howard White & Nina Ashley O. Dela Cruz & Ashrita Saran & John Eyers & Denny John & Ella Beveridge & Nina Blöndal, 2021. "Studies of the effectiveness of transport sector interventions in low‐ and middle‐income countries: An evidence and gap map," Campbell Systematic Reviews, John Wiley & Sons, vol. 17(4), December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yamauchi, Futoshi & Muto, Megumi & Chowdhury, Shyamal & Dewina, Reno & Sumaryanto, Sony, 2010. "Are Schooling and Roads Complementary? Evidence from Rural Indonesia," Working Papers 10, JICA Research Institute.
    2. Yamauchi, Futoshi & Muto, Megumi & Chowdhury, Shyamal K. & Dewina, Reno & Sumaryanto, Sony, 2009. "Spatial Networks, Labor Supply and Income Dynamics: Evidence from Indonesian Villages," 2009 Conference, August 16-22, 2009, Beijing, China 51571, International Association of Agricultural Economists.
    3. repec:eee:labchp:v:3:y:1999:i:pb:p:2859-2939 is not listed on IDEAS
    4. Yamauchi, Futoshi, 2014. "Roads, labor markets, and human capital : evidence from rural Indonesia," Policy Research Working Paper Series 7139, The World Bank.
    5. Futoshi Yamauchi, 2016. "The Effects of Improved Roads on Wages and Employment: Evidence from Rural Labour Markets in Indonesia," Journal of Development Studies, Taylor & Francis Journals, vol. 52(7), pages 1046-1061, July.
    6. repec:lic:licosd:37416 is not listed on IDEAS
    7. Vandercasteelen, Joachim & Beyene, Seneshaw Tamru & Minten, Bart & Swinnen, Johan, 2018. "Cities and agricultural transformation in Africa: Evidence from Ethiopia," World Development, Elsevier, vol. 105(C), pages 383-399.
    8. Stifel, David & Minten, Bart, 2015. "Market Access, Welfare, and Nutrition: Evidence from Ethiopia:," ESSP working papers 77, International Food Policy Research Institute (IFPRI).
    9. Chamberlin, Jordan & Jayne, T.S., 2013. "Unpacking the Meaning of ‘Market Access’: Evidence from Rural Kenya," World Development, Elsevier, vol. 41(C), pages 245-264.
    10. Marie-Ange VEGANZONES-VAROUDAKIS, 2000. "Infrastructures, investissement et croissance : un bilan de dix années de recherches," Working Papers 200007, CERDI.
    11. Nijkamp, Peter & Poot, Jacques, 2004. "Meta-analysis of the effect of fiscal policies on long-run growth," European Journal of Political Economy, Elsevier, vol. 20(1), pages 91-124, March.
    12. Laszlo, Sonia, 2008. "Education, Labor Supply, and Market Development in Rural Peru," World Development, Elsevier, vol. 36(11), pages 2421-2439, November.
    13. Rosenzweig, Mark R., 1987. "Labor Markets in Low Income Countries: Distortions, Mobility and Migration," Bulletins 7506, University of Minnesota, Economic Development Center.
    14. Peter Nijkamp & Jacques Poot, Victoria, 2002. "Meta-Analysis of the Impact of Fiscal Policies on Long-Run Growth," Tinbergen Institute Discussion Papers 02-028/3, Tinbergen Institute, revised 23 Apr 2003.
    15. Kumari, Anita & Kumar Sharma, Anil, 2017. "Infrastructure financing and development: A bibliometric review," International Journal of Critical Infrastructure Protection, Elsevier, vol. 16(C), pages 49-65.
    16. Marcel Fafchamps & Agnes R. Quisumbing, 1999. "Human Capital, Productivity, and Labor Allocation in Rural Pakistan," Journal of Human Resources, University of Wisconsin Press, vol. 34(2), pages 369-406.
    17. Marcel Fafchamps & Agnes R. Quisumbing & IFPRI, 2006. "Household Formation and Marriage Markets," Economics Series Working Papers GPRG-WPS-039, University of Oxford, Department of Economics.
    18. Dillon, Brian & Brummund, Peter & Mwabu, Germano, 2019. "Asymmetric non-separation and rural labor markets," Journal of Development Economics, Elsevier, vol. 139(C), pages 78-96.
    19. Massimiliano Calì & Carlo Menon, 2013. "Does Urbanization Affect Rural Poverty? Evidence from Indian Districts," The World Bank Economic Review, World Bank, vol. 27(2), pages 171-201.
    20. Adhvaryu, Achyuta & Nyshadham, Anant, 2011. "Labor Complementarities and Health in the Agricultural Household," Center Discussion Papers 107263, Yale University, Economic Growth Center.
    21. Foster, Andrew D & Rosenzweig, Mark R, 1996. "Technical Change and Human-Capital Returns and Investments: Evidence from the Green Revolution," American Economic Review, American Economic Association, vol. 86(4), pages 931-953, September.
    22. Ulimwengu, John M. & Funes, Jose & Headey, Derek D. & You, Liang, 2009. "Paving the Way for Development: The Impact of Road Infrastructure on Agricultural Production and Household Wealth in the Democratic Republic of Congo," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49292, Agricultural and Applied Economics Association.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:39:y:2011:i:12:p:2232-2244. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/worlddev .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.