THE EFFECT OF URBAN TRANSPORTATION SYSTEMS ON EMPLOYMENT OUTCOMES AND TRAFFIC CONGESTION

This dissertation comprises two papers that examine the effect of urban transportation systems on employment outcomes and traffic congestion. The first paper evaluates the labor market effects of subway systems on low-skilled workers. A model of labor supply predicts that this should improve search and employment outcomes. The empirical findings confirm that improved subway access increases low-skilled labor force participation. Related effects for light rail and bus service are much smaller. For low-skilled men without a car, a 10 percent expansion in subway, rail, and bus service increases labor force participation by 3.0, 0.3, and 0.3 percentage points, respectively. Improved subway service increases hourly wage, but has no significant effect on work hours and commuting time. These findings confirm that subway access increases travel speed and has potential to expand the geographic scope of workers’ labor market. The second paper investigates the effects of subway expansions on passenger miles traveled (PMT) in subways and vehicle miles traveled (VMT) on roads in the US. Drawing on a panel dataset that tracks city-level expansions of subway and road systems, estimates indicate that the fundamental law of subway congestion holds as the PMT increases one for one with the length of the subway systems. Subway systems have substitution and growth effects on road traffic. A 10 percent expansion of a subway system reduces contemporaneous traffic on ring interstate highways and non-highway arterial roads by 0.7 percent and 1.4 percent, respectively. With a three-year lag, a 10 percent increase in subway capacity increases VMT on ring highways by 0.4 percent and increase VMT on radial highways by 1.7 percent. Together, these estimates suggest that subway expansions do not reduce congestion on radial highways but do relieve congestion on roads that are close substitutes to subways (ring highways and non-highway arterial roads)