No.10 Are Schooling and Roads Complementary? Evidence from Rural Indonesia

  • #Working Papers

This paper examines the impact of spatial connectivity on household income growth and non-agriculture labor supply, combining household panel data and village census in Indonesia during the period of 1995-2007. Empirical results show that the impacts of improved local road quality on income growth and the transition to non-agricultural labor markets depends on household education and distance to economic centers. In particular, post-primary education significantly increases the benefit from the improvement of local spatial connectivity in remote areas, promoting labor transition to non-agricultural sectors. Education and local road quality are complementary, mutually increasing non-agricultural labor supply and income in remote areas.

Futoshi Yamauchi, Megumi Muto, Shyamal Chowdhury, Reno Dewina, Sony Sumaryanto
Date of issuance
March 2010
Related areas
  • #Asia
  • #Agricultural / Rural Development
  • #Poverty Reduction
Research area
Economic Growth and Poverty Reduction
Research project