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


  • 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.

Suggested Citation

  • Carlos Augusto Olarte Bacares, 2013. "Do public transport improvements increase employment and income in a city?," ERSA conference papers ersa13p1040, European Regional Science Association.
  • Handle: RePEc:wiw:wiwrsa:ersa13p1040

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    References listed on IDEAS

    1. Paul Krugman, 1997. "Development, Geography, and Economic Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 026261135x, September.
    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, , vol. 35(9), pages 1651-1668, September.
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    More about this item


    Improvements of public transports; Endogeneity; Causality; Effective size of labor market; Size of enterprises;

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R40 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - General
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations


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