 The Effects of Improved Roads on Wages and Employment: Evidence from Rural Labour Markets in IndonesiaJournal of Development Studies, 2016, vol. 52, issue 7, 1046-1061 Abstract: This paper examines the impact of road quality on labour supply and wages using household panel data from rural Indonesia. The analysis uses fixed-effect instrumental variable estimation by first differencing two-round panel data. First, road projects are found to increase the transportation speed. Second, the empirical results from intra-village variations of household endowments and labour-market behaviour show that an increase in transportation speed raised wages in both non-agricultural and agricultural employment, and was associated with a decline in working time in agricultural employment, for the households whose members are relatively educated. The findings support potential complementarity between road quality and education, implying that the government’s public investments in roads and education should be coordinated to capture cross-augmenting positive impacts in the long run. Date: 2016 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:jdevst:v:52:y:2016:i:7:p:1046-1061 Ordering information: This journal article can be ordered from DOI: 10.1080/00220388.2015.1121242 Access Statistics for this article Journal of Development Studies is currently edited by Howard White, Oliver Morrissey and Ken Shadlen More articles in Journal of Development Studies from Taylor & Francis Journals |
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