The Effects of Improved Roads on Wages and Employment Evidence from Rural Labor Markets in Indonesia

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Tác giả: Futoshi Yamauchi

Ngôn ngữ: eng

Ký hiệu phân loại: 181.16 *Indonesia

Thông tin xuất bản: Taylor and Francis, 2016

Mô tả vật lý:

Bộ sưu tập: Tài liệu truy cập mở

ID: 291478

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.
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