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Spatial networks, labor supply, and income dynamics: Evidence from Indonesian villages

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

Abstract

"This paper uses household panel and village census data from Indonesia to examine the impact of spatial connectivity (road) development on household income growth and nonagricultural labor supply. The empirical results show that the impacts of improvements in local road quality (which positively correlate with transportation speed) on income growth and the transition to nonagricultural labor markets depend on the distance to economic centers and the household education level. In particular, postprimary education significantly increases the benefit from local spatial connectivity improvement in remote areas and promotes labor transition to nonagricultural sectors. Education and local road quality are complementary, mutually increasing income growth and nonagricultural labor income in remote areas. The gain from improvements in local connectivity (measured by average road quality) depends on village remoteness and initial household-level endowments." from authors' abstract

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Bibliographic Info

Paper provided by International Food Policy Research Institute (IFPRI) in its series IFPRI discussion papers with number 897.

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Date of creation: 2009
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Handle: RePEc:fpr:ifprid:897

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Keywords: income growth; Spatial connectivity; Rural economy; Education; Social protection; Human capital;

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Cited by:
  1. 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.

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