Rural Roads and Local Economic Development
- American Economic Review (Forthcoming)
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 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.
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