No.36 Does Infrastructure Improve Human Well-being? Analysis of Japan's Subnational Human Development Index (1960–2020)

Infrastructure affects a wide range of human activities. This paper examines the impact of infrastructure on the level of human well-being by analyzing long-term panel data (1960–2020) on the newly constructed Human Development Index (HDI) for each prefecture in Japan. The analysis shows that infrastructure generally has a positive impact on HDI. The impact of total transport, water and sanitation, and education infrastructure on HDI is found to be significantly positive, with HDI increasing by 0.016 for every 1% increase in infrastructure stock. This positive impact is largely attributable to transport infrastructure, which contributes to higher productivity and economic growth through increased economic activity of people and firms and higher school enrollment through improved access to schools. However, the transport infrastructure has a negative impact on life expectancy, which may be attributed to the worsening of traffic accidents and air pollution in the 1960s and 1970s. The results of the above analysis contribute to clarifying the general relationship between infrastructure and human well-being. The results provide a more multifaceted evaluation of Japan's infrastructure, allowing insights into the increasing investment in infrastructure for emerging economies.

Keywords: Infrastructure, Public capital, Human Development Index, Japan, Transport, Water and sanitation, Education