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The Babeldaob Road: The Impact of Road Construction on Rural Labor Force Outcomes in the Republic of Palau

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Author Info
Randall Akee () (IZA Bonn and Harvard University)

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Abstract

This research examines the impact of road construction on rural labor force outcomes in a developing country. A new road built in the Republic of Palau links formerly inaccessible rural areas to more urban wage sector employment. We use two censuses conducted five years apart which perfectly bracket the road construction period. The data allow us to identify households that moved in the intervening five year period, thereby correcting any endogenous movement attributable to the road construction. Utilizing a difference-indifference regression strategy and matched panel data, we find that households impacted by the new road construction tend to increase their wage sector employment, decrease their self-employment in agriculture, decrease the number of international migrants sent abroad and increase their ownership of automobiles. The findings also show that inequality decreases both within and between regions. The impact of road construction on average household wages and income is negligible.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2452.

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Length: 28 pages
Date of creation: Nov 2006
Date of revision:
Handle: RePEc:iza:izadps:dp2452

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Related research
Keywords: infrastructure; economic development; rural labor force;

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Find related papers by JEL classification:
O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Regional, Urban, and Rural Analyses
R29 - Urban, Rural, and Regional Economics - - Household Analysis - - - Other
R40 - Urban, Rural, and Regional Economics - - Transportation Systems - - - General

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Jacoby, Hanan C, 2000. "Access to Markets and the Benefits of Rural Roads," Economic Journal, Royal Economic Society, vol. 110(465), pages 713-37, July. [Downloadable!] (restricted)
    Other versions:
  2. Randall K. Q. Akee, 2007. "Who Leaves and Who Returns? Deciphering Immigrant Self-Selection from a Developing Country," IZA Discussion Papers 3268, Institute for the Study of Labor (IZA). [Downloadable!]
  3. Gibson, John & Rozelle, Scott, 2003. "Poverty and Access to Roads in Papua New Guinea," Economic Development and Cultural Change, University of Chicago Press, vol. 52(1), pages 159-85, October.
  4. 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. [Downloadable!] (restricted)
  5. John Giles, 2000. "Is Life More Risky in the Open? Household Risk-Coping and the Opening of China's Labor Markets," William Davidson Institute Working Papers Series 314, William Davidson Institute at the University of Michigan Stephen M. Ross Business School. [Downloadable!]
    Other versions:
  6. van de Walle, Dominique, 2002. "Choosing Rural Road Investments to Help Reduce Poverty," World Development, Elsevier, vol. 30(4), pages 575-589, April. [Downloadable!] (restricted)
    Other versions:
  7. Jyotsna Jalan & Martin Ravallion, 1998. "Geographic Poverty Traps?," Boston University - Institute for Economic Development 86, Boston University, Institute for Economic Development.
  8. Van de Walle, D., 1996. "Infrastructure and Poverty in Vietnam," Papers 121, World Bank - Living Standards Measurement.
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This page was last updated on 2009-11-23.

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