Railway expansions and human capital growth: A 20-year causal analysis in Tokyo

Our study uncovers the causal link between railway expansions in Tokyo and a significant increase in the number of university graduates and high-skilled workers, with the effects being notably more pronounced in areas initially having lower proportions of those groups. We examine the mechanisms behind this phenomenon by (1) demonstrating how railway expansions attract university graduates and high-skilled workers by reducing commute costs, (2) improve access to universities, and (3) boost railway ridership. Our analysis employs both a difference-in-differences framework and a market access approach to separately evaluate the gentrification near new stations and the dispersion of human capital driven by enhanced network connectivity. The results reveal that university graduate rates and skilled worker rates rise by an average of 2.5 % and 1.4 %, respectively, due to improved connectivity. These findings underscore the value of railway expansion in fostering human capital development and provide critical insights for urban planners, policymakers, and transportation authorities, emphasizing the need to align transportation development with strategies for equitable urban growth.