Educational Investment Responses to Economic Opportunity: Evidence from Indian Road Construction

56 Pages Posted: 25 Aug 2016 Last revised: 23 Mar 2017

See all articles by Anjali Adukia

Anjali Adukia

University of Chicago

Sam Asher

World Bank Development Research Group (DECRG)

Paul Novosad

Dartmouth College

Multiple version iconThere are 2 versions of this paper

Date Written: January 1, 2017

Abstract

The rural poor in developing countries, once economically isolated, are increasingly being connected to regional markets. Whether these new connections crowd out or encourage educational investment is a central question. We examine the impacts 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. Treatment heterogeneity supports the predictions of a standard human capital investment model: enrollment increases are largest where nearby labor markets offer the highest returns to education, and lowest where they imply high opportunity costs of schooling.

JEL Classification: I25; O18; J24

Suggested Citation

Adukia, Anjali and Asher, Sam and Novosad, Paul, Educational Investment Responses to Economic Opportunity: Evidence from Indian Road Construction (January 1, 2017). Available at SSRN: https://ssrn.com/abstract=2827365 or http://dx.doi.org/10.2139/ssrn.2827365

Anjali Adukia

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

HOME PAGE: http://home.uchicago.edu/adukia

Sam Asher

World Bank Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

HOME PAGE: http://samuelasher.com

Paul Novosad (Contact Author)

Dartmouth College ( email )

Department of Sociology
Hanover, NH 03755
United States

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