Educational Investment Responses to Economic Opportunity: Evidence from Indian Road Construction
American Economic Journal: Applied Economics
vol. 12,
no. 1, January 2020
(pp. 348-76)
Abstract
The rural poor in developing countries, once economically isolated, are increasingly being connected to outside markets. Whether these new connections crowd out or encourage educational investment is a central question. We examine the effects on educational choices of 115,000 new roads built under India's flagship road construction program. We find that children stay in school longer and perform better on standardized exams. Heterogeneity in treatment effects supports a standard human capital investment model: enrollment increases most when nearby labor markets offer high returns to educationand least when they imply high opportunity costs of schooling.Citation
Adukia, Anjali, Sam Asher, and Paul Novosad. 2020. "Educational Investment Responses to Economic Opportunity: Evidence from Indian Road Construction." American Economic Journal: Applied Economics, 12 (1): 348-76. DOI: 10.1257/app.20180036Additional Materials
JEL Classification
- I25 Education and Economic Development
- I26 Returns to Education
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration
- O18 Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- R42 Transportation Economics: Government and Private Investment Analysis; Road Maintenance, Transportation Planning
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