Baires, Wilber Isaac; Dinarte, Lelys Ileana (2017). 'Unintended Effects Of Public Infrastructure On Development: The Interaction Between Labor, Educational And Crime Outcomes In El Salvador' Paper presented at the annual conference of the HDCA, Cape Town 2017.


We exploit the construction of a highway in the north of El Salvador Northern Transnational Highway (NTH), to measure short-term impacts of infrastructure on development outcomes, such as economic activity, labor force participation in the formal sector, educational outcomes and criminal activities, using an IV approach. We find that the construction of this highway impacted positively relevant economic activities in the northern region. However, it reduced the labor force participation in the formal sector, for males and females between 15-19 years old, and increase dropout rates of males between 13-16 years old. To explain these results, we propose the gangs' arrival to municipalities closer to the highway as a plausible mechanism that could be explaining these results. We find that municipalities closer to the NTH face an increase in the short-term homicides rate and extortions, without any effect in other non-gangs related crimes.

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