Road Construction and Rural Household Income : Empirical Evidence from Village Road Paving in China

Almost a billion people living in rural areas get no access to the paved road network, especially in developing countries. This paper explores the consequences of road paving projects in rural Chinese villages since 2010, which cost over $100 billion annually and reach nearly every household in rural China. Using the China Family Panel Studies and China Traffic Statistics Yearbook, we find that the paving road projects increase the income of rural households, especially ones with lower education levels and income. The mechanism analysis also shows that the increase in household incomes mainly results from a rise in local employment