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Educational Investment Responses to Economic Opportunity: Evidence from Indian Road Construction

Listed author(s):
  • Adukia, Anjali
  • Asher, Samuel
  • Novosad, Paul

The rural poor in developing countries, once economically isolated, are increasingly being connected to regional markets. Whether these new connections crowd out or encourage educational investment is a central question. We examine the impacts on educational choices of 115,000 new roads built under India's flagship road construction program. We find that children stay in school longer and perform better on standardized exams. Treatment heterogeneity supports the predictions of a standard human capital investment model: enrollment increases are largest where nearby labor markets offer the highest returns to education and lowest where they imply high opportunity costs of schooling.

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File URL: https://mpra.ub.uni-muenchen.de/80194/1/MPRA_paper_80194.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 80194.

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Date of creation: Jan 2017
Handle: RePEc:pra:mprapa:80194
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