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Roads, labor markets, and human capital : evidence from rural Indonesia

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  • Yamauchi, Futoshi

Abstract

This paper uses household panel data from rural Indonesia to examine the impact of road quality on labor supply and wages. First, road projects are found to increase transportation speed. Second, the empirical results from intra-village variations of household endowments and labor market behavior show that an increase in transportation speed raised wages in nonagricultural and agricultural employment, and was associated with a decline in working time in agricultural employment, for households whose members are relatively educated. The findings support potential complementarity between road quality and education.

Suggested Citation

  • Yamauchi, Futoshi, 2014. "Roads, labor markets, and human capital : evidence from rural Indonesia," Policy Research Working Paper Series 7139, The World Bank.
    • Handle: RePEc:wbk:wbrwps:7139
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    References listed on IDEAS

    as
    1. Yamauchi, Futoshi, 2004. "Are experience and schooling complementary? Evidence from migrants' assimilation in the Bangkok labor market," Journal of Development Economics, Elsevier, vol. 74(2), pages 489-513, August.
    2. Jacoby, Hanan G. & Minten, Bart, 2009. "On measuring the benefits of lower transport costs," Journal of Development Economics, Elsevier, vol. 89(1), pages 28-38, May.
    3. 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.
    4. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
    5. Futoshi Yamauchi, 2012. "Prenatal Seasonality, Child Growth, and Schooling Investments: Evidence from Rural Indonesia," Journal of Development Studies, Taylor & Francis Journals, vol. 48(9), pages 1323-1341, September.
    6. Fan, Shenggen & Zhang, Linxiu & Zhang, Xiaobo, 2004. "Reforms, Investment, and Poverty in Rural China," Economic Development and Cultural Change, University of Chicago Press, vol. 52(2), pages 395-421, January.
    7. 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.
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    9. Marcel Fafchamps & Forhad Shilpi, 2005. "Cities and Specialisation: Evidence from South Asia," Economic Journal, Royal Economic Society, vol. 115(503), pages 477-504, April.
    10. 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.
    11. Yamauchi, Futoshi & Muto, Megumi & Chowdhury, Shyamal & Dewina, Reno & Sumaryanto, Sony, 2011. "Are Schooling and Roads Complementary? Evidence from Income Dynamics in Rural Indonesia," World Development, Elsevier, vol. 39(12), pages 2232-2244.
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    Cited by:

    1. Wouter Zant, 2018. "Trains, Trade, and Transaction Costs: How Does Domestic Trade by Rail Affect Market Prices of Malawi Agricultural Commodities?," The World Bank Economic Review, World Bank, vol. 32(2), pages 334-356.

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    Keywords

    Transport Economics Policy&Planning; Roads&Highways; Housing&Human Habitats; Labor Policies; Road Safety;
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