Effects of the Transport Support Scheme on employment and commuting patterns among public rental housing residents in Hong Kong

Since 1973, the Hong Kong Special Administrative Region (“HKSAR”) government has succeeded in decentralizing its population from the overcrowded urban area to the satellite towns. During this time, many low-income people had also relocated to the new satellite towns for affordable public rental housing (“PRH”) where originally the government expected manufacturing factories in urban areas to relocate there during suburbanisation. However, instead, the factories mostly moved to Mainland China, while service jobs still clustered at the central business districts in Hong Kong, resulting in “Spatial Mismatch” between jobs and residents in the new towns. Poor people living in PRH may suffer from high travel costs for remote job opportunities and are thus more likely to be unemployed than their urban counterparts. To tackle this problem, in 2007, the HKSAR government launched the Transport Support Scheme (“TSS”) that provides transport allowance to job seekers and low-income employees in the four remote districts to encourage cross-district employment. In this study, the effectiveness of this scheme in reducing unemployment and extending the commuting distances for job opportunities for the PRH residents are evaluated. A difference-in-difference model is used to compare the probabilities of being unemployed and the commuting distances between residents in the eligible and the non-eligible areas before and after the launch of the TSS. It is observed that the TSS has significantly decreased the probability of unemployment among the PRH residents living in the four eligible districts, especially among the young and middle-aged male residents. Conditional upon employment, the TSS also increased cross-district employment among the middle-aged female residents. This study provides strong evidence on the effectiveness of the TSS and casts practical implications for transport support policies in compact cities that heavily rely on their public transport system.