Wednesday, 8 July 2015

Waiting for the R Train: Public Transportation and Employment

By Justin Tyndall

In 2012, Hurricane Sandy served to highlight the fragility of coastal cities in an era of increasingly unpredictable weather. The impact of the storm on many New York City residents was devastating. The storm’s effects were far reaching, but the stone and steel that forms the skeleton of New York City was largely left intact. Many of the more than 20 bridges and tunnels that connect Manhattan Island to the rest of New York City suffered minor damage, but nearly all were able to reopen in the days or weeks following the storm. A stark exception to this robust recovery of transportation was the severe damage to the Montague Street Tunnel –which carries the R train subway between Brooklyn and Manhattan– the tunnel would take nearly two years to be fully repaired.

The fact that some New York City neighborhoods have historically been extended strong public transit while others have not is far from random. The most economically developed areas of New York are provided with dense public transportation options, while less prominent neighborhoods are not. The same relationship exists in essentially every city where public transportation operates. The simple observation that neighborhoods with transit are doing better economically is insufficient to say anything about the economic impact of transit: transit is certainly a symptom of an economically developed neighborhood, whether it is also a cause of local economic success is normally impossible to say.

The differential fate of the Montague Street Tunnel and the R train offer an unprecedentedly clear natural experiment by which particular neighborhoods were, randomly and without warning, deprived of vital public transportation amenities. This situation allowed for the investigation of the true effect public transportation imparts on the neighborhoods it serves.

In 2013, when the R train disruption was most severe, the unemployment rate within Brooklyn neighborhoods that were dependent on the R train increased by 0.4 percentage points, marking a departure from steady reductions in unemployment over the previous few years. Furthermore, neighborhoods in the remainder of New York City saw unemployment fall 1.4 percentage points in the same period. By controlling for city wide trends in employment, and the characteristics that make the treatment and control neighborhoods different, this paper was able to get a relatively clean estimate of the impact the train closure had on unemployment for those neighborhoods affected: unemployment was a full 1.4 percentage points higher along to Brooklyn R train in 2013 than it would have been if not for the subway disruption.

Job creation in cities has been the goal of numerous and diverse policies including job training programs, and incentives for businesses to locate in disadvantaged areas. These programs have been shown to be tremendously expensive, and are often ineffective. Advocacy for public transit often focuses on the regional economic benefits, and land value effects; however, public transit’s apparent ability to substantially reduce local unemployment should be given more attention. Meeting the employment needs of isolated urban communities through policy should include consideration of the powerful role played by public transportation.