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Do public transport improvements increase employment and income in a city?

Listed author(s):
  • Carlos Augusto Olarte Bacares


Previous researches have proved the existence of a causal relationship between the concentration of jobs in a city and the income of inhabitants. Other researchers have studied the close and even nearly causal relationship between those variables and the degree of accessibility or of infrastructures like highways on different zones of a city. Nevertheless, no one research has taken into account the degree to which each area of a city benefits from the latest improvements of public transports. The aim of this research is to analyze the relationship between the size of labor market, the income and the employment concentration on different zones of a city with respect to the degree of improvements of public transports (Transmilenio) in a city of a developing country like Bogota. The degree of enhancements of public transports in a zone is suspected to be endogenous to those three variables. Through the use of OLS estimations and then 2SLS estimations for each dependent variable (3), the validation of endogeneity gives enough tools to infer a positive or a negative causality of improvements of public transports. The size of companies defined by the number of jobs they offer plays a role of instrumental variable to explain the degree of improvement of public transports on each zone. It suggests three different scenarios that depend on the size of companies established on each zone. In essence, the number of jobs, the size of the labor market and the income are largely defined by the level of improvements of urban public transports on each zone of the city and the causality relationship changes depending on the size of companies established on each zone. Results of this empirical research give some robust evidences. In the case of Bogotá, public transports improvements have a causality relationship on the income of inhabitants on each zone and on the number of jobs and it change with respect to the size of enterprises. In contrast, the size of labor market, defined as the number of reachable jobs on a specific time, is not a cause of the degree of the presence of public transports' enhancements.

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Paper provided by European Regional Science Association in its series ERSA conference papers with number ersa13p1040.

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Date of creation: Nov 2013
Handle: RePEc:wiw:wiwrsa:ersa13p1040
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  1. Paul Krugman, 1997. "Development, Geography, and Economic Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 026261135x, July.
  2. Gérard Koenig, 1974. "Théorie économique de l'accessibilité urbaine," Revue Économique, Programme National Persée, vol. 25(2), pages 275-297.
  3. Attanasi, Giuseppe & Casoria, Fortuna & Centorrino, Samuele & Urso, Giulia, 2013. "Cultural investment, local development and instantaneous social capital: A case study of a gathering festival in the South of Italy," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 47(C), pages 228-247.
  4. Mizuki Kawabata, 2003. "Job access and employment among low-skilled autoless workers in US metropolitan areas," Environment and Planning A, Pion Ltd, London, vol. 35(9), pages 1651-1668, September.
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