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Connectivity and Rural Development: Examining India’s Rural Road Construction Scheme

Author

Listed:
  • Kumar, Santosh

    (University of Notre Dame)

  • Shandal, Monica

    (University of California, Santa Cruz)

  • Zucker, Ariel

    (UC Santa Cruz)

Abstract

We examine the impact of rural road connectivity on economic and social outcomes in the context of India’s PMGSY, the world’s largest rural road program. Using a novel village-level survey explicitly designed around PMGSY’s rollout, we exploit quasi-random variation in road placement to estimate causal effects. We find that roads increase producer prices by 1.4 SD, reduce consumer prices by 0.6 SD, shift labor from agriculture to local casual work, and decrease short-term migration. Additionally, road connectivity improves governance, delays marriages, and improves wedding quality. Our findings highlight the role of infrastructure in shaping rural economies and social institutions.

Suggested Citation

  • Kumar, Santosh & Shandal, Monica & Zucker, Ariel, 2025. "Connectivity and Rural Development: Examining India’s Rural Road Construction Scheme," IZA Discussion Papers 17775, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp17775
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    More about this item

    Keywords

    migration; wages; prices; PMGSY; rural roads; India;
    All these keywords.

    JEL classification:

    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • J43 - Labor and Demographic Economics - - Particular Labor Markets - - - Agricultural Labor Markets
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R42 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government and Private Investment Analysis; Road Maintenance; Transportation Planning

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