Past Highlight Economic benefits of transportation infrastructure: historical evidence from India and America 10 February 2017 Development , Public Finance Authors: Dave Donaldson (Stanford) Dave Donaldson is an empirical trade economist and recipient of the 2017 John Bates Clark Medal. His research examines the intersection of international trade and development economics. Donaldson’s paper “Railroads of the Raj: Estimating the Impact of Transportation Infrastructure?” (American Economic Review, forthcoming) investigates the economic benefits from building transportation infrastructure studying the case of railways in 19th century India. This paper is widely viewed as both a methodological breakthrough and substantively important paper in the field. The article below provides a summary of his work.
An increase in average income per capita does not necessarily guarantee that the broad population is better off. If all the income gains were captured by companies’ top executives and shareholders, the broad population might not benefit and could actually be worse off. Our analysis finds, however, that the gains from immigration are broadly shared across the population. Migration increases the average income per capita of both the bottom 90% and the top 10% of earners, even though high-skilled migration benefits more top earners — possibly because of a stronger synergy between migrants and natives with high skills. Moreover, the Gini coefficient — a broad measure of income inequality within the bottom 90% of earners — is not affected by the migrant share.