Abstract
We examine the relationship between public transit finance, economic growth, and equity. This is the first study to analyze the long-term effect of transit operation revenues on employment growth for all workers and low-skilled workers. We use state-of-the-art dynamic panel data techniques to analyze municipalities covered by 26 transit agencies in the US state of Ohio. We find that both government subsidies and fare revenue, indicators of transit system improvement, have a positive impact on overall jobs. An increase in government subsidies by $10 per capita results in a 1.1% increase in overall jobs in the same year. The local jobs also grow by 4.6% when fare revenue is increased by $10 per capita. In addition, fare revenue has a positive impact on the number of low-skilled jobs both in current and future years. A one dollar increase in fare revenue per capita grows the number of low-skilled jobs by 1.3% in the same year and 0.4% in the next year.
Similar content being viewed by others
Availability of data and material
Data for this article are publicly available and can be accessed at the DOI address after this is published online.
Code availability
Codes in R will be available at the DOI address after publication.
References
Anderson TW, Hsiao C (1982) Formulation and estimation of dynamic models using panel data. J Econ 18:47–82
Arellano M, Bond S (1991) Some tests of specification for panel data: monte carlo evidence and an application to employment equations. Rev Econ Stud 58(2):277–297
Brasington DM, Haurin DR (2009) Parents, peers, or school inputs: which components of school outcomes are capitalized into house value? Reg Sci Urban Econ 39(5):523–529
Canales KL, Nilsson I, Delmelle E (2019) Do light rail transit investments increase employment opportunities? The case of Charlotte, North Carolina. Reg Sci Policy Pract 11:189–202
Carnevale AP, Smith N, Strohl J (2013) Recovery: Job growth and education requirements through 2020. Center on Education and the Workforce, Georgetown University, Washington, DC
Chatman DG, Noland RB (2011) Do public transport improvements increase agglomeration economies? a review of literature and an agenda for research. Transport Review 31(6):725–742
Chatman DG, Noland RB (2014) Transit service, physical agglomeration and productivity in US metropolitan areas. Urban Studies 51(5):917–937
Chatman DG, Noland RB, Klein N (2016) Firm births, access to transit, and agglomeration in Portland, Oregon, and Dallas, Texas. Transp Res Rec 2598:1–10
Chen Z, Haynes KE (2015) Multilevel assessment of public transportation infrastructure: a spatial econometric computable general equilibrium approach. Ann Reg Sci 54:663–685
Credit K (2019) Transitive properties: a spatial econometric analysis of new business creation around transit. Spat Econ Anal 11(1):26–52
De Vor F, de Groot HLF (2010) Agglomeration externalities and localized employment growth: the performance of industrial sites in Amsterdam. Ann Reg Sci 44:409–413
Faulk D, Hicks MJ (2016) The impact of bus transit on employee turnover: evidence from quasi-experimental samples. Urban Studies 53(9):1836–1852
Garrett M, Taylor BD (1999) Reconsidering Social Equity in Public Transit. Berkeley Plan J 13:6–27
Ihlanfeldt KR, Sjoquist DL (1998) The spatial mismatch hypothesis: a review of recent studies and their implications for welfare reform. Hous Policy Debate 9(4):849–892
Iseki H (2016) Equity in regional public transit finance: tradeoffs between social and geographic equity. J Urban Plan Dev 142(4):1–10
Iseki H, Taylor BD (2002) The demographics of public transit subsidies: a case of Los Angeles. In: 81st Annual meeting of the transportation research board (TRB), Transportation research board, Washington, DC
Jackson V, Patton W (2017) How Ohio funds public transit. Policy Matters Ohio, Cleveland
Jin Z, Schmöcker JD, Maadi S (2019) On the interaction between public transport demand, service quality and fare for social welfare optimization. Res Transp Econ 76:1–12
Melo PC, Graham DJ, D. (2018) Transport-induced agglomeration effects: evidence for US metropolitan areas. Reg Science Policy Pract 10:37–47
Merlin LA, Hu L (2017) Does competition matter in measures of job accessibility? explaining employment in Los Angeles. J Transp Geogr 64:77–88
Millo G (2017) A simple randomization test for spatial correlation in the presence of common factors and serial correlation. Reg Sci Urban Econ 66:28–38
Ohio Statewide Transit Needs Study. Final report. Columbus, OH: Ohio Department of Transportation, 2015
Shen Q (2001) A Spatial analysis of job openings and access in a US Metropolitan area. J Am Plann Assoc 67(1):53–68
Small KA, Gomez-Ibanez JA (1999) Urban transportation. In: Chelshire P, Mills ES (eds) Handbook of regional and urban economics. Applied Urban Economics, Netherlands
Taylor BD, Samples K (2002) Jobs, Jobs, Jobs: Political perceptions, economic reality, and capital bias in U.S. transit subsidy policy. Public Works Manag Policy 6(4):250–263
Tomer A (2011) Transit access and zero-vehicle households. Brookings Institution, Washington
Transit Cooperation Research Program. Funding strategies for public transportation. TCRP Project H-7, Washington, DC: Transportation Research Board, 1997
U.S. Census Bureau. LEHD Origin-Destination Employment Statistics (LODES) Dataset Structure Format Version 7.5, Washington, DC: US Census Bureau, 2021. https://lehd.ces.census.gov/data/lodes/LODES7/LODESTechDoc7.5.pdf
Venables AJ (2007) Evaluating Urban transport improvements: cost-benefit analysis in the presence of agglomeration and income taxation. JTEP 41(2):173–188
Watson A (2017) Employment trends by typical entry-level education requirement. Monthly Labor Review. US Bureau of Labor Statistics, Washington
Wooldridge JM (2010) Econometric analysis of cross section and panel data. MIT Press, Cambridge
Yu H, Jiao J, Houston E, Peng Z (2018) Evaluating the Relationship between rail transit and industrial agglomeration: an observation from the dallas-Fort Worth Region, TX. J Transp Geogr 67:33–52
Funding
The authors received no financial support for the research, authorship, and/or publication of this article.
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Conflicts of interest
No potential conflict of interest was reported by the author.
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
I would like to express sincere appreciation to the Western Regional Science Association (WRSA) for nominating me as the 35th Tiebout Prize winner and giving me the opportunity to further develop this article. The coauthor and I are thanksful to Joachim Bean from the Ohio Department of Transportation Office of Transit for providing us transit revenue data. We also appreciate the panels and discussants at 67th North American Regional Science Council (NARSC) and 60th WRSA meetings for valuable insight and suggestions.
Rights and permissions
Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.
About this article
Cite this article
Oh, S., Brasington, D.M. Transit finance, growth, and equity: a dynamic panel analysis on the effect of transit revenues on low-skilled employment. Ann Reg Sci 72, 313–333 (2024). https://doi.org/10.1007/s00168-022-01201-2
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s00168-022-01201-2