The Contribution of the Development of Transportation to Improving Labour Market Outcomes for Youth in China

We investigate how the expansion of high-speed rail and national highways enhance labour market outcomes for young people in China. Utilising individual-level panel data and difference-in-differences methods, we document that the development of transportation improves young people's employment rate, earnings, and schooling level. Migration may be a mechanism for improving labour market outcomes for young people who can move to places with better economic opportunities. The development of transportation facilitates migration and the regional diffusion of investment that creates employment opportunities. We find that the expansion of high-speed rail tends to encourage young people to stay put in the short term. Longer term, the development of high-speed rail and of national highways increase young people's probability of migration.