IDEAS home Printed from https://ideas.repec.org/p/ags/iaae09/51571.html
   My bibliography  Save this paper

Spatial Networks, Labor Supply and Income Dynamics: Evidence from Indonesian Villages

Author

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

Abstract

This paper examines the impact of spatial connectivity development on household income growth and non-agriculture labor supply, combining household panel data and village census in Indonesia. Empirical results show that the impacts of the improvement of local road quality in the area (positively correlated with transportation speed) on income growth and the transition to non-agricultural labor markets depends on the distance to economic centers and household education. In particular, post-primary education significantly increases the benefit from the local spatial connectivity improvement in remote areas and labor transition to non-agricultural sectors. Education and local road quality are complementary, mutually increasing income growth and non-agricultural labor income in remote areas. The gain from improvements in local connectivity (measured by the average road quality) depends on village remoteness and initial household-level endowment.

Suggested Citation

  • 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.
    • Handle: RePEc:ags:iaae09:51571
    DOI: 10.22004/ag.econ.51571
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/51571/files/Paper1_Spatialnetwork_Labor2.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.51571?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
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lars-Hendrik Roller & Leonard Waverman, 2001. "Telecommunications Infrastructure and Economic Development: A Simultaneous Approach," American Economic Review, American Economic Association, vol. 91(4), pages 909-923, September.
    2. 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.
    3. 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.
    4. Aschauer, David Alan, 1989. "Is public expenditure productive?," Journal of Monetary Economics, Elsevier, vol. 23(2), pages 177-200, March.
    5. Gramlich, Edward M, 1994. "Infrastructure Investment: A Review Essay," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1176-1196, September.
    6. 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.
    7. 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.
    8. 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.
    9. 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.
    10. Marcel Fafchamps & Forhad Shilpi, 2005. "Cities and Specialisation: Evidence from South Asia," Economic Journal, Royal Economic Society, vol. 115(503), pages 477-504, April.
    11. 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.
    12. World Bank, 2003. "World Development Indicators 2003," World Bank Publications - Books, The World Bank Group, number 13920.
    13. Fafchamps, Marcel & Wahba, Jackline, 2006. "Child labor, urban proximity, and household composition," Journal of Development Economics, Elsevier, vol. 79(2), pages 374-397, April.
    14. 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.
    15. 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.
    16. 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.
    17. 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.
    18. Dewina, Reno & Yamauchi, Futoshi, 2010. "Human Capital, Mobility, and Income Dynamics: Evidence from Indonesia," Working Papers 11, JICA Research Institute.
    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. Wong, Ho Lun & Wang, Yu & Luo, Renfu & Zhang, Linxiu & Rozelle, Scott, 2017. "Local governance and the quality of local infrastructure: Evidence from village road projects in rural China," Journal of Public Economics, Elsevier, vol. 152(C), pages 119-132.
    2. Wong, Ho Lun & Luo, Renfu & Zhang, Linxiu & Rozelle, Scott, 2013. "Providing quality infrastructure in rural villages: The case of rural roads in China," Journal of Development Economics, Elsevier, vol. 103(C), pages 262-274.
    3. Sulser, T. B., 2009. "Green and blue water accounting in the Limpopo and Nile basins: implications for food and agricultural policy," IWMI Working Papers H042476, International Water Management Institute.
    4. 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.
    5. Lisa Daniels & Nicholas Minot, 2021. "Do remote areas benefit from economic growth? Evidence from Uganda," Journal of International Development, John Wiley & Sons, Ltd., vol. 33(3), pages 545-568, April.

    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 & 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.
    3. repec:eee:labchp:v:3:y:1999:i:pb:p:2859-2939 is not listed on IDEAS
    4. 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.
    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. Silvia Bertarelli, 2006. "Public capital and growth," Politica economica, Società editrice il Mulino, issue 3, pages 361-398.
    7. Rosenzweig, Mark R., 1987. "Labor Markets in Low Income Countries: Distortions, Mobility and Migration," Bulletins 7506, University of Minnesota, Economic Development Center.
    8. Francisco Rodríguez, 2006. "Have Collapses in Infrastructure Spending Led to Cross-Country Divergence in per Capita GDP?," Wesleyan Economics Working Papers 2006-013, Wesleyan University, Department of Economics.
    9. Musisi, A.A., 2006. "Physical public infrastructure and private sector output/productivity in Uganda: a firm level analysis," ISS Working Papers - General Series 19182, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    10. Stephane Straub, 2008. "Infrastructure and Growth in Developing Countries: Recent Advances and Research Challenges," Edinburgh School of Economics Discussion Paper Series 179, Edinburgh School of Economics, University of Edinburgh.
    11. Yamauchi, Futoshi, 2014. "Roads, labor markets, and human capital : evidence from rural Indonesia," Policy Research Working Paper Series 7139, The World Bank.
    12. Wan, Guanghua & Zhang, Yan, 2018. "The direct and indirect effects of infrastructure on firm productivity: Evidence from Chinese manufacturing," China Economic Review, Elsevier, vol. 49(C), pages 143-153.
    13. 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.
    14. Marie-Ange VEGANZONES-VAROUDAKIS, 2000. "Infrastructures, investissement et croissance : un bilan de dix années de recherches," Working Papers 200007, CERDI.
    15. Feng, Qu & Wu, Guiying Laura, 2018. "On the reverse causality between output and infrastructure: The case of China," Economic Modelling, Elsevier, vol. 74(C), pages 97-104.
    16. Antonio Alvarez & Carlos Arias & Luis Orea, 2006. "Econometric testing of spatial productivity spillovers from public capital," Hacienda Pública Española / Review of Public Economics, IEF, vol. 178(3), pages 9-21, September.
    17. Knut Sandberg Eriksen, 2011. "Do road investments lead to economic growth?," ERSA conference papers ersa10p1613, European Regional Science Association.
    18. Achyuta Adhvaryu & Anant Nyshadham, 2011. "Labor Complementarities and Health in the Agricultural Household," Working Papers 996, Economic Growth Center, Yale University.
    19. Mamatzakis, E. C., 2003. "Public infrastructure and productivity growth in Greek agriculture," Agricultural Economics, Blackwell, vol. 29(2), pages 169-180, October.
    20. Ghosh, Arghya & Meagher, Kieron, 2015. "The politics of infrastructure investment: The role of product market competition," Journal of Economic Behavior & Organization, Elsevier, vol. 119(C), pages 308-329.
    21. repec:cuf:journl:y:2014:v:15:i:2:calderon:serven is not listed on IDEAS
    22. Alfredo M. Pereira & Jorge M. Andraz, 2013. "On The Economic Effects Of Public Infrastructure Investment: A Survey Of The International Evidence," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 38(4), pages 1-37, December.

    More about this item

    Keywords

    Community/Rural/Urban Development; Labor and Human Capital;

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General

    Statistics

    Access and download statistics

    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:ags:iaae09:51571. 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: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/iaaeeea.html .

    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.