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The Effect of Infrastructure Access and Quality on Non-Farm Enterprises in Rural Indonesia

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Author Info
John Gibson () (University of Waikato)
Susan Olivia (University of California, Davis)

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Abstract

There is growing interest in the rural non-farm sector in developing countries as a contributor to economic growth, employment generation, livelihood diversification and poverty reduction. Access to infrastructure is identified in some studies as a factor that affects non-farm rural employment and income but less attention has been paid to the constraints imposed by poor quality infrastructure. In this paper we use data from 4000 households in rural Indonesia to show that the quality of two key types of infrastructure – roads and electricity – affects both employment in and income from non-farm enterprises. It appears that there would be gains from development strategies that improve both the access to and the quality of rural infrastructure.

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File URL: ftp://mngt.waikato.ac.nz/RePEc/wai/econwp/0817.pdf
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Publisher Info
Paper provided by University of Waikato, Department of Economics in its series Working Papers in Economics with number 08/17.

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Length: 19 pages
Date of creation: 31 Dec 2008
Date of revision:
Handle: RePEc:wai:econwp:08/17

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Related research
Keywords: infrastructure; non-farm rural economy; Indonesia;

Find related papers by JEL classification:
H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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References listed on IDEAS
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  1. Escobal, Javier, 2001. "The Determinants of Nonfarm Income Diversification in Rural Peru," World Development, Elsevier, vol. 29(3), pages 497-508, March. [Downloadable!] (restricted)
  2. 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:
  3. Lanjouw, Peter, 1999. "Rural Nonagricultural Employment and Poverty in Ecuador," Economic Development and Cultural Change, University of Chicago Press, vol. 48(1), pages 91-122, October.
  4. Corral, Leonardo & Reardon, Thomas, 2001. "Rural Nonfarm Incomes in Nicaragua," World Development, Elsevier, vol. 29(3), pages 427-442, March. [Downloadable!] (restricted)
  5. 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.
  6. Fan, Shenggen & Chan-Kang, Connie, 2005. "Road development, economic growth, and poverty reduction in China:," Research reports 138, International Food Policy Research Institute (IFPRI). [Downloadable!]
    Other versions:
  7. Anne Booth, 2002. "The Changing Role Of Non-Farm Activities In Agricultural Households In Indonesia: Some Insights From The Agricultural Censuses," Bulletin of Indonesian Economic Studies, Taylor and Francis Journals, vol. 38(2), pages 179-200, August. [Downloadable!] (restricted)
  8. Lanjouw, Peter, 2001. "Nonfarm Employment and Poverty in Rural El Salvador," World Development, Elsevier, vol. 29(3), pages 529-547, March. [Downloadable!] (restricted)
  9. Alberto E Isgut, 2004. "Non-farm Income and Employment in Rural Honduras: Assessing the Role of Locational Factors," The Journal of Development Studies, Taylor and Francis Journals, vol. 40(3), pages 59-86, February. [Downloadable!] (restricted)
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