The rural poor in developing countries, once economically isolated, are increasingly being connected to outside markets. Whether these new connections crowd out or encourage educational investment is a central question. We examine the effects 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. Heterogeneity in treatment effects supports a standard human capital investment model: enrollment increases most when nearby labor markets offer high returns to educationand least when they imply high opportunity costs of schooling.
Adukia, Anjali, Sam Asher, and Paul Novosad.
"Educational Investment Responses to Economic Opportunity: Evidence from Indian Road Construction."
American Economic Journal: Applied Economics,
Education and Economic Development
Returns to Education
Human Capital; Skills; Occupational Choice; Labor Productivity
Economic Development: Human Resources; Human Development; Income Distribution; Migration
Economic Development: Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
Transportation Economics: Government and Private Investment Analysis; Road Maintenance, Transportation Planning