village), which can explain only 20% of the reallocation of workers out of agriculture. We also rule out changes in permanent migration, implying that the results we find are not the result of compositional changes to the village population.

In short, we find that the primary impact of new roads is to make it easier for workers to access outside labor markets. In the medium term at least, our research suggests that these external labor markets provide better opportunities than anything in their villages, even with high quality links to the road network. Roads alone appear to be insufficient to transform the economic structure of remote villages.

This paper contributes to a wide literature estimating the impacts of investments in transportation infrastructure. New highways and railroads have been shown to have substantial impacts on the allocation of economic activity, land use and migration.<sup>2</sup> But studies of major transportation corridors have limited external validity to the rural roads that we study, which connect poor, rural villages to regional markets. Existing research on rural roads in developing countries has used difference-in-differences and matching methods, largely finding positive impacts on both agricultural and non-agricultural earnings.<sup>3</sup> These studies are 2Trunk transportation infrastructure has been shown to raise the value of agricultural land (Donaldson and Hornbeck, 2016), increase agricultural trade and income (Donaldson, n.d.), reduce the risk of famine (Burgess and Donaldson, 2012), increase migration (Morten and Oliveira, 2017) and accelerate urban decentralization (Baum-Snow et al., 2017). Results on growth have proven somewhat mixed: there is evidence that reducing transportation costs can increase (Ghani et al., 2015; Storeygard, 2016), decrease (Faber, 2014) or leave unchanged (Banerjee et al., 2012) growth rates in local economic activity. Atkin et al. (2015) show that intra-country trade costs are very high in developing countries, with remote areas benefiting little from increased integration into world markets. For a recent survey of the economic impacts of transportation costs, see Redding and Turner (2015).

3Most closely related are papers that estimate the impact of rural road programs in Bangladesh (Khandker et al., 2009; Khandker and Koolwal, 2011; Ali, 2011), Ethiopia (Dercon et al., 2009), Indonesia (Gibson and Olivia, 2010), Papua New Guinea (Gibson and Rozelle, 2003) and Vietnam (Mu and van de Walle, 2011). Concurrent research on the PMGSY demonstrates that districts that built more roads experienced improved economic outcomes (Aggarwal, 2017), and that PMGSY roads lead to gains in agriculture (Shamdasani, 2016) and educational outcomes (Mukherjee, 2012; Adukia et al., 2017). Other papers also suggest that the lack of rural transport infrastructure may be a significant contributor to rural underdevelopment. Wantchekon et al. (2015) provide evidence that transport costs are a strong predictor of poverty across sub-Saharan Africa. Fafchamps and Shilpi (2005) offer cross-sectional evidence that villages closer to cities are more economically diversified, with residents more likely to work for wages. An older literature suggested that rural transport infrastructure was highly correlated with positive development outcomes (Binswanger et al., 1993; Fan and Hazell, 2001; Zhang and Fan, 2004), estimating high returns to such investments. Later 4