Is Better Access To Markets A Substitute For Educated Parents? Evidence From Rural India
Author(s) Reshad N. Ahsan, Arpita Chatterjee and Shahe Emran


This paper focuses on a particularly important channel, human capital investment, through which domestic market integration may affect intergenerational economic mobility. Using household data from India Human Development Survey, our empirical analysis focuses on the rural households. We use two sources of plausibly exogenous variations: (1) historical road infrastructure, and (2) crow-fly distance to the Golden Quadrilateral road network. The estimates from the OLS and 2SLS regressions for the average effect show that better market access improves childrens schooling attainment. More importantly, the interaction of fathers education with market access is negative; better market access thus works as a substitute for a higher educated father. The estimates from IV quantile regressions using the control function approach show that better market access weakens intergenerational persistence the most for the children in the middle of the conditional distribution.

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