The Spatial Effects of Road Infrastructure on Employment in Pakistan: Quantifying the Role of Complementary Factors

Saima Nawaz, Saba Anwar, Nasir Iqbal


This study uses district-level panel data to measure the
spatial effects of road infrastructure on employment while accounting
for institutional quality, rural connectivity, and labour productivity
in Pakistan. The estimates based on the spatial regression model show
that road density positively and significantly impacts employment. A 10
percent increase in road infrastructure would lead to a 4.3 percent
increase in employment directly and indirectly—the spillover effects of
road infrastructure help optimise the benefits of public investment in
infrastructure projects. Empirical results reveal that institutional
framework and access to rural areas complement road infrastructure in
channelising road development’s employment effects. These findings
suggest a call for a comprehensive policy to reap the potential benefits
of road infrastructure. Apart from developing the road network, the
government should also develop complementary factors, namely
institutional reforms and rural connectivity. Keywords: Road
Infrastructure, Employment, Institutional Quality, Spatial Analysis,

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