Abstract: China's rural transportation infrastructure has achieved tremendous success, profoundly impacting agricultural development and the lifestyles of farmers. This paper utilizes the micro household data from the fixed observation points in China's rural areas from 2009 to 2017, and estimates the impact of improvements in transportation infrastructure on the outworking of rural labor within the framework of the generalized Roy model. The study finds that connectivity to the main traffic arteries increases the income of farmers working outside their hometowns. Further research indicates that there exists essential heterogeneity in the impact of rural transportation on farmers' outworking incomes. In rural areas that are more easily connected to the main traffic arteries, the impacts of such connectivity on outworking income is negative. However, for rural residents with poorer accessibility to transportation infrastructure, connecting to the main traffic arteries significantly increases their income from working outside their hometowns. By simulating the effects of further improvements in future rural transportation infrastructure, the study finds that the income from outworking will noticeably increase for residents of less developed rural areas after connecting to the main traffic arteries. This paper demonstrates that connecting to the main traffic arteries can significantly narrow the income gap between less developed rural areas and more developed regions, thus providing an academic support for the national initiative to achieve access to all villages" in rural areas.

Key words:

rural infrastructure, income disparity, marginal treatment effect, general Roy model, essential heterogeneity