Transportation infrastructure development and subjective socio-economic status: A quasi-experiment in establishing rural bus stations in China

Abstract

Infrastructure construction has significant economic benefits for rural residents, but little literature discusses the impact on their psychological benefits. Setting the establishment of bus stations in rural China as a quasi-natural experiment and based on the 2014–2016 China Labor-Force Dynamic Survey, this study uses the difference-in-differences model to examine the effect of bus stations on the subjective socio-economic status (SES) of rural residents. The results show that the SES of rural residents has significantly improved after establishing bus stations. In addition, the establishment of bus stations has raised the wages and operating income of rural residents, as well as medical and educational expenses. Thus, rural bus stations contribute to the accumulation of physical and human capital, thereby increasing SES. In terms of reducing information asymmetry, the construction of the bus station has a stronger promotion effect for groups with low education status and income levels. In terms of promoting factor mobility, construction is more helpful in promoting physical health and residents living in rugged areas. These findings contribute to the literature on social class in rural areas by clarifying the psychological mechanism of infrastructure construction's effect on SES.