Hit the Road Juan: Welfare and Labor Market Effects of High-Quality Roads in Ecuador

Osmar Bolivar Rosales (), Gustavo Canavire Bacarreza () and Andrew Balthrop ()
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Gustavo Canavire Bacarreza: World Bank
Andrew Balthrop: University of Tennessee, Knoxville
Authors registered in the RePEc Author Service: Gustavo Javier Canavire-Bacarreza

No 18451, IZA Discussion Papers from IZA Network @ LISER

Abstract: Road infrastructure boosts economic opportunities and thus contributes to poverty alleviation. This paper investigates the causal impact of paved primary roads on poverty and income mobility in Ecuador, with particular attention to the mechanisms through which these effects materialize. exploiting variation in road expansion between 2012 and 2019, we track the construction of new major roads and link this information to socioeconomic outcomes reported in the national household survey. To achieve representativeness at a fine geographical scale, we employ the max-p region algorithm. Using staggered difference-in-differences estimators, we identify the causal effects of road infrastructure on poverty reduction and income dynamics. The findings indicate that access to paved major roads significantly reduces poverty rates overall. Middle-income households benefit from income growth following road access and these gains are attributable primarily to improvements in employment quality rather than increases in employment rates, with the largest effects concentrated in the primary sector.

Keywords: road infrastructure; poverty; middle class; Ecuador (search for similar items in EconPapers)
JEL-codes: C21 H54 I32 O18 (search for similar items in EconPapers)
Date: 2026-03
New Economics Papers: this item is included in nep-dev, nep-edu and nep-tre
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Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp18451

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