Rural Development or Rural Exit? Evidence from Road Construction in India

Résumé

More than one billion people worldwide live in rural areas without access to the paved road network. We measure the impacts of India's national rural road construction program using regression discontinuity and data covering every individual and firm in rural India. The main effect of new feeder roads was to allow workers to take up non-farm work outside of their village. However, there are no changes in consumption or agricultural outcomes, and non-farm employment in the village expands only slightly. Even with better market connections, rural areas may be unable to produce significant growth in economic opportunities.