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Impacts of Improved Infrastructure on Labor Allocation and Livelihoods: The Case of the Jamuna Multipurpose Bridge, Bangladesh

  • Khondoker Abdul Mottaleb
  • Dil Bahadur Rahut
Original Article

Abstract

The present study econometrically examines the impacts of an improved road transportation system on labor allocation, input use, and livelihood diversification in an economically lagging part of Bangladesh. Before 1998, the northwest part of Bangladesh, home to 22% of nearly 160 million people, was de-linked from the economically advanced eastern part of Bangladesh. On June 23, 1998, the Jamuna Multipurpose Bridge (JMB) on the river Jamuna was opened for use. The bridge has established direct road and rail transportation systems between the northwestern part and the eastern part of Bangladesh. Using these phenomena, and linking the Household Income and Expenditure Survey (HIES) data, HIES2000 and HIES2010, this study elucidates the impacts of improved infrastructure on labor allocation and the input application behavior of the sampled households. Applying the difference-in-difference estimation approach, this study demonstrates that the JMB that has linked the northwest and eastern regions has encouraged labor out-migration, resulting in the most vulnerable day-laborers in both farm and non-farm sectors moving to other jobs with relatively high marginal returns. The improved transportation infrastructure had also increased the daily wage rates, which were lower than the comparison group, and the cropping intensity in the Rajshahi and Rangpur divisions. The study, therefore, concludes that investment in infrastructure can be instrumental in unleashing economic growth and alleviating poverty in the economically struggling parts of developing countries.

Keywords

Road transportation River Bridge Poverty Infrastructure Disparity Experiment group Control group Household Labor allocation Farm Non-farm 

Résumé

La présente étude examine économétriquement les effets d'un système de transport routier amélioré sur la répartition de la main-d'œuvre, l'utilisation des intrants et la diversification des moyens de subsistance dans une région en Bangladesh en retard sur le plan économique. Avant 1998, la partie nord-ouest du Bangladesh, qui abritait 22% des quelque 160 millions de personnes, était dissociée de la partie orientale économiquement avancée du Bangladesh. Le 23 juin 1998, le Pont Multifonctionnel Jamuna (JMB) sur la rivière Jamuna a été ouvert. Le pont a établi des systèmes de transport routier et ferroviaire directs entre le nord-ouest et l'est du Bangladesh. En utilisant ces phénomènes et en reliant les données HIES (HIES) et HIES2010 de l'Enquête sur les revenus et les dépenses des ménages (HIES), cette étude élucide les impacts de l'amélioration des infrastructures sur la répartition de la main-d'œuvre et le comportement des ménages échantillonnés en matière d'application des intrants. En appliquant l’approche d’estimation des écarts dans les différences (DID), cette étude démontre que le JMB qui a relié les régions du nord-ouest et de l’est a encouragé la migration de main-d’œuvre, ce qui a permis aux travailleurs les plus vulnérables des secteurs agricole et non agricole de s’orienter à d'autres emplois avec des rendements marginaux relativement élevés. L'amélioration de l'infrastructure de transport avait également augmenté les taux de salaire journaliers qui étaient inférieurs à ceux du groupe de comparaison et l'intensité du système de culture des ménages des divisions de Rajshahi et de Rangpur. L’étude conclut donc que l’investissement dans les infrastructures peut jouer un rôle déterminant dans le décollage de la croissance économique et la réduction de la pauvreté dans les régions économiquement moins développées dans les pays en développement.

Notes

Acknowledgements

The authors acknowledge three unanimous referees, and the participants of the workshop on “Rural Transformation in the 21st Century: The Challenges of Low-Income, Late-Transforming Countries” organized by the CGIAR PIM in Vancouver, BC, Canada (July 28–August 2, 2018) for their suggestions for improving the paper. We acknowledge the support from CGIAR PIM. The contents and opinions expressed herein are those of the authors and do not necessarily reflect the views of the authors’ institution. The usual disclaimer applies.

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Copyright information

© European Association of Development Research and Training Institutes (EADI) 2018

Authors and Affiliations

  1. 1.Socioeconomics ProgramCIMMYT (International Maize and Wheat Improvement Center)TexcocoMexico
  2. 2.Socioeconomics ProgramCIMMYTTexcocoMexico

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