“rds010 ” — 2012/5/11 — 7:02 — page 1 — #1 Urban Growth and Transportation

We estimate the effects of interstate highways on the growth of U.S. cities between 1983 and 2003. We find that a 10 % increase in a city’s initial stock of highways causes about a 1∙5 % increase in its employment over this 20 year period. To estimate a structural model of urban growth and transportation, we rely on an instrumental variables estimation that uses a 1947 plan of the interstate highway system, an 1898 map of railroads, and maps of the early explorations of the U.S. as instruments for 1983 highways