The objective of this study was to investigate the improvement due to cement modification in soil subgrade and quantify its cost-effectiveness. The research scope of this study included experimental investigation of soil with cement additive, performing pavement design at three design traffics and then estimating the initial cost of construction. A total of 12 pavement sections were considered in this study to examine the optimum level of improvement and the most cost-effective solution. Study findings showed that the strength of soil improved with increasing cement content. Though the maximum improvement was observed at 6% cement modification, the optimum improvement can be achieved at 4% cement content. When the design thicknesses for all the pavement sections were examined, it was noticed that the maximum reduction in thickness was noticed when 4% cement was used for low traffic levels. Overall, it was envisioned that the research framework developed as part of this study would help road agencies, practitioners, policymakers, and other stakeholders to evaluate various alternative strategies for subgrade layers, and advance the state-of-the-art pertinent to the construction of flexible pavements.