IDEAS home Printed from https://ideas.repec.org/p/ash/wpaper/122.html
   My bibliography  Save this paper

Rural Roads, Climate Change, and the Dynamics of Structural Transformation: Evidence from India

Author

Listed:
  • Aparajita Dasgupta

    (Ashoka University)

  • Devvrat Raghav

    (University of Virginia)

Abstract

How does access to infrastructure mediate the processes of structural transformation in the presence of climate shocks? By exploiting a large-scale rural road construction program in India, we ask whether rural road connectivity can preserve the gains from structural transformation in emerging markets. In comparison to the existing literature, we provide a newer framework to study the effects of road infrastructure access in mitigating the impact of climate shocks on structural transformation. The program roll out criteria allows us to employ a fuzzy difference-in-discontinuity design to provide the first line of causal evidence in this area. Overall, we find a mixed effect of rural road connectivity on agricultural participation. Interestingly, we find that while road connectivity enables exits from farm labour it also raises the share of households in cultivation. Importantly, while temperature shocks drive down local demand, this effect is somewhat counteracted by access to paved roads. Our results suggest the role of rural infrastructure policies in alleviating the burden of rising temperature, which has first order policy relevance in the context of designing policy instruments to tackle long-term climate change, not just within the country but for all rural regions across the developing world.

Suggested Citation

  • Aparajita Dasgupta & Devvrat Raghav, 2024. "Rural Roads, Climate Change, and the Dynamics of Structural Transformation: Evidence from India," Working Papers 122, Ashoka University, Department of Economics.
    • Handle: RePEc:ash:wpaper:122
    as

    Download full text from publisher

    File URL: https://dp.ashoka.edu.in/ash/wpaper/paper122_0.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Michael Greenstone & Rema Hanna, 2014. "Environmental Regulations, Air and Water Pollution, and Infant Mortality in India," American Economic Review, American Economic Association, vol. 104(10), pages 3038-3072, October.
    2. Anderson, Michael L., 2008. "Multiple Inference and Gender Differences in the Effects of Early Intervention: A Reevaluation of the Abecedarian, Perry Preschool, and Early Training Projects," Journal of the American Statistical Association, American Statistical Association, vol. 103(484), pages 1481-1495.
    3. Cattaneo, Matias D. & Jansson, Michael & Ma, Xinwei, 2024. "Local regression distribution estimators," Journal of Econometrics, Elsevier, vol. 240(2).
    4. Ren Mu & Dominique van de Walle, 2011. "Rural Roads and Local Market Development in Vietnam," Journal of Development Studies, Taylor & Francis Journals, vol. 47(5), pages 709-734.
    5. Anjali Adukia & Sam Asher & Paul Novosad, 2020. "Educational Investment Responses to Economic Opportunity: Evidence from Indian Road Construction," American Economic Journal: Applied Economics, American Economic Association, vol. 12(1), pages 348-376, January.
    6. Dave Donaldson, 2018. "Railroads of the Raj: Estimating the Impact of Transportation Infrastructure," American Economic Review, American Economic Association, vol. 108(4-5), pages 899-934, April.
    7. Dave Donaldson & Richard Hornbeck, 2016. "Railroads and American Economic Growth: A "Market Access" Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(2), pages 799-858.
    8. Andrew D. Foster & Mark R. Rosenzweig, 2022. "Are There Too Many Farms in the World? Labor Market Transaction Costs, Machine Capacities, and Optimal Farm Size," Journal of Political Economy, University of Chicago Press, vol. 130(3), pages 636-680.
    9. Ed Day & Sam Fankhauser & Nick Kingsmill & Hélia Costa & Anna Mavrogianni, 2019. "Upholding labour productivity under climate change: an assessment of adaptation options," Climate Policy, Taylor & Francis Journals, vol. 19(3), pages 367-385, March.
    10. Marcel Fafchamps & Forhad Shilpi, 2013. "Determinants of the Choice of Migration Destination," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 75(3), pages 388-409, June.
    11. Matias D. Cattaneo & Michael Jansson & Xinwei Ma, 2020. "Simple Local Polynomial Density Estimators," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 115(531), pages 1449-1455, July.
    12. Robin Burgess & Remi Jedwab & Edward Miguel & Ameet Morjaria & Gerard Padró i Miquel, 2015. "The Value of Democracy: Evidence from Road Building in Kenya," American Economic Review, American Economic Association, vol. 105(6), pages 1817-1851, June.
    13. Matsuyama, Kiminori, 1992. "Agricultural productivity, comparative advantage, and economic growth," Journal of Economic Theory, Elsevier, vol. 58(2), pages 317-334, December.
    14. Benjamin Faber, 2014. "Trade Integration, Market Size, and Industrialization: Evidence from China's National Trunk Highway System," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(3), pages 1046-1070.
    15. Guy Michaels, 2008. "The Effect of Trade on the Demand for Skill: Evidence from the Interstate Highway System," The Review of Economics and Statistics, MIT Press, vol. 90(4), pages 683-701, November.
    16. Sam Asher & Teevrat Garg & Paul Novosad, 2020. "The Ecological Impact of Transportation Infrastructure," The Economic Journal, Royal Economic Society, vol. 130(629), pages 1173-1199.
    17. Moussa P. Blimpo & Robin Harding & Leonard Wantchekon, 2013. "Public Investment in Rural Infrastructure: Some Political Economy Considerations," Journal of African Economies, Centre for the Study of African Economies, vol. 22(suppl_2), pages -83, August.
    18. E. Somanathan & Rohini Somanathan & Anant Sudarshan & Meenu Tewari, 2021. "The Impact of Temperature on Productivity and Labor Supply: Evidence from Indian Manufacturing," Journal of Political Economy, University of Chicago Press, vol. 129(6), pages 1797-1827.
    19. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    20. Jonathan Colmer, 2021. "Temperature, Labor Reallocation, and Industrial Production: Evidence from India," American Economic Journal: Applied Economics, American Economic Association, vol. 13(4), pages 101-124, October.
    21. Marshall Burke & Solomon M. Hsiang & Edward Miguel, 2015. "Climate and Conflict," Annual Review of Economics, Annual Reviews, vol. 7(1), pages 577-617, August.
    22. Banerjee, Abhijit & Duflo, Esther & Qian, Nancy, 2020. "On the road: Access to transportation infrastructure and economic growth in China," Journal of Development Economics, Elsevier, vol. 145(C).
    23. Gibson, John & Olivia, Susan, 2010. "The Effect of Infrastructure Access and Quality on Non-Farm Enterprises in Rural Indonesia," World Development, Elsevier, vol. 38(5), pages 717-726, May.
    24. Stefan Dercon & Daniel O. Gilligan & John Hoddinott & Tassew Woldehanna, 2009. "The Impact of Agricultural Extension and Roads on Poverty and Consumption Growth in Fifteen Ethiopian Villages," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(4), pages 1007-1021.
    25. William Nordhaus, 2019. "Climate Change: The Ultimate Challenge for Economics," American Economic Review, American Economic Association, vol. 109(6), pages 1991-2014, June.
    26. Andrew D. Foster & Esther Gehrke, 2017. "Start What You Finish! Ex Ante Risk and Schooling Investments in the Presence of Dynamic Complementarities," NBER Working Papers 24041, National Bureau of Economic Research, Inc.
    27. Bilal, Adrien & Känzig, Diego, 2024. "The Macroeconomic Impact of Climate Change: Global vs. Local Temperature," CEPR Discussion Papers 19203, C.E.P.R. Discussion Papers.
    28. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2012. "Temperature Shocks and Economic Growth: Evidence from the Last Half Century," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(3), pages 66-95, July.
    29. Guido Imbens & Karthik Kalyanaraman, 2012. "Optimal Bandwidth Choice for the Regression Discontinuity Estimator," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(3), pages 933-959.
    30. Teevrat Garg & Maulik Jagnani & Hemant K. Pullabhotla, 2024. "Rural Roads, Farm Labor Exits, and Crop Fires," American Economic Journal: Economic Policy, American Economic Association, vol. 16(3), pages 420-450, August.
    31. Treb Allen & David Atkin, 2022. "Volatility and the Gains From Trade," Econometrica, Econometric Society, vol. 90(5), pages 2053-2092, September.
    32. Aggarwal, Shilpa, 2021. "The long road to health: Healthcare utilization impacts of a road pavement policy in rural India," Journal of Development Economics, Elsevier, vol. 151(C).
    33. Sam Asher & Teevrat Garg & Paul Novosad, 2020. "The Ecological Impact of Transportation Infrastructure," The Economic Journal, Royal Economic Society, vol. 130(629), pages 1173-1199.
    34. Sam Asher & Paul Novosad, 2020. "Rural Roads and Local Economic Development," American Economic Review, American Economic Association, vol. 110(3), pages 797-823, March.
    35. Aparajita Dasgupta & Anahita Karandikar & Devvrat Raghav, 2024. "Road Access, Fertility, and Child Health in Rural India," Population and Development Review, The Population Council, Inc., vol. 50(1), pages 117-147, March.
    36. Aggarwal, Shilpa, 2018. "Do rural roads create pathways out of poverty? Evidence from India," Journal of Development Economics, Elsevier, vol. 133(C), pages 375-395.
    37. Melissa LoPalo, 2023. "Temperature, Worker Productivity, and Adaptation: Evidence from Survey Data Production," American Economic Journal: Applied Economics, American Economic Association, vol. 15(1), pages 192-229, January.
    38. Maggie Liu & Yogita Shamdasani & Vis Taraz, 2023. "Climate Change and Labor Reallocation: Evidence from Six Decades of the Indian Census," American Economic Journal: Economic Policy, American Economic Association, vol. 15(2), pages 395-423, May.
    39. Taraz, Vis, 2018. "Can farmers adapt to higher temperatures? Evidence from India," World Development, Elsevier, vol. 112(C), pages 205-219.
    40. Jacoby, Hanan C, 2000. "Access to Markets and the Benefits of Rural Roads," Economic Journal, Royal Economic Society, vol. 110(465), pages 713-737, July.
    41. Gollin, Douglas & Rogerson, Richard, 2014. "Productivity, transport costs and subsistence agriculture," Journal of Development Economics, Elsevier, vol. 107(C), pages 38-48.
    42. Sam Asher & Paul Novosad, 2020. "Rural Roads and Local Economic Development," American Economic Review, American Economic Association, vol. 110(3), pages 797-823, March.
    43. Conley, T. G., 1999. "GMM estimation with cross sectional dependence," Journal of Econometrics, Elsevier, vol. 92(1), pages 1-45, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gertler, Paul J. & Gonzalez-Navarro, Marco & Gračner, Tadeja & Rothenberg, Alexander D., 2024. "Road maintenance and local economic development: Evidence from Indonesia’s highways," Journal of Urban Economics, Elsevier, vol. 143(C).
    2. Gertler, Paul J & Gonzalez-Navarro, Marco & Gracner, Tadeja & Rothenberg, Alexander, 2023. "Road Maintenance and Local Economic Development," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt38m633q0, Department of Agricultural & Resource Economics, UC Berkeley.
    3. Djemaï, Elodie & Clark, Andrew E. & D’Ambrosio, Conchita, 2024. "Take the Highway? Paved roads and well-being in Africa," World Development, Elsevier, vol. 183(C).
    4. Shamdasani, Yogita, 2021. "Rural road infrastructure & agricultural production: Evidence from India," Journal of Development Economics, Elsevier, vol. 152(C).
    5. Das, Abhiman & Ghani, Ejaz & Grover, Arti & Kerr, William & Nanda, Ramana, 2024. "JUE insight: Infrastructure and Finance: Evidence from India’s GQ highway network," Journal of Urban Economics, Elsevier, vol. 142(C).
    6. Pkhikidze,Nino, 2024. "Connectivity, Road Quality, and Jobs : Evidence from Armenia," Policy Research Working Paper Series 10847, The World Bank.
    7. Noah Kaiser & Christina K. Barstow, 2022. "Rural Transportation Infrastructure in Low- and Middle-Income Countries: A Review of Impacts, Implications, and Interventions," Sustainability, MDPI, vol. 14(4), pages 1-48, February.
    8. Luke Heath Milsom, 2023. "Moving OpportunityLocal Connectivity and Spatial Inequality," CEPREMAP Working Papers (Docweb) 2303, CEPREMAP.
    9. He, Guojun & Xie, Yang & Zhang, Bing, 2020. "Expressways, GDP, and the environment: The case of China," Journal of Development Economics, Elsevier, vol. 145(C).
    10. Priya Manwaring & Tanner Regan, 2023. "Public Disclosure and Tax Compliance: Evidence from Uganda," CSAE Working Paper Series 2023-05, Centre for the Study of African Economies, University of Oxford.
    11. Vanden Eynde, Oliver & Wren-Lewis, Liam, 2021. "Complementarities in Infrastructure: Evidence from Rural India," CEPREMAP Working Papers (Docweb) 2104, CEPREMAP.
    12. Fenske, James & Kala, Namrata & Wei, Jinlin, 2023. "Railways and cities in India," Journal of Development Economics, Elsevier, vol. 161(C).
    13. repec:osf:socarx:ejb8x_v1 is not listed on IDEAS
    14. Brian Blankespoor & M Shahe Emran & Forhad Shilpi & Lu Xu, 2022. "Bridge to bigpush or backwash? Market integration, reallocation and productivity effects of Jamuna Bridge in Bangladesh [Agricultural technology choice and transport]," Journal of Economic Geography, Oxford University Press, vol. 22(4), pages 853-871.
    15. Claudia N. Berg & Uwe Deichmann & Yishen Liu & Harris Selod, 2017. "Transport Policies and Development," Journal of Development Studies, Taylor & Francis Journals, vol. 53(4), pages 465-480, April.
    16. Aggarwal, Shilpa, 2021. "The long road to health: Healthcare utilization impacts of a road pavement policy in rural India," Journal of Development Economics, Elsevier, vol. 151(C).
    17. Chaurey, Ritam & Le, Duong Trung, 2022. "Infrastructure maintenance and rural economic activity: Evidence from India," Journal of Public Economics, Elsevier, vol. 214(C).
    18. Eynde, Oliver Vanden & Wren-Lewis, Liam, 2024. "Complementarities in Infrastructure: Evidence from Indian Agriculture," SocArXiv ejb8x, Center for Open Science.
    19. Berger, Thor, 2019. "Railroads and Rural Industrialization: evidence from a Historical Policy Experiment," Explorations in Economic History, Elsevier, vol. 74(C).
    20. Aggarwal, Shilpa, 2018. "Do rural roads create pathways out of poverty? Evidence from India," Journal of Development Economics, Elsevier, vol. 133(C), pages 375-395.
    21. Abu-Qarn, Aamer & Lichtman-Sadot, Shirlee, 2019. "Connecting Disadvantaged Communities to Work and Higher Education Opportunities: Evidence from Public Transportation Penetration to Arab Towns in Israel," IZA Discussion Papers 12824, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    Climate Shocks;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ash:wpaper:122. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ashoka University (email available below). General contact details of provider: https://www.ashoka.edu.in .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.