Better Urban Transport Improves Labour Market Outcomes: Evidence from a Subway Expansion in Chile

Abstract

This paper identifies and quantifies the effects of better transport accessibility on labour market outcomes. A 24 km new subway line and the extension of two existing lines in Santiago (Chile) in the mid-2000s reduced the distance between the subway network and 29 (out of 35) municipalities in the urban area of the city’s Metropolitan Region. Estimates are derived using fixed effects models that account for endogeneity in the relation between employment outcomes and workers’ municipality of residence–subway network distance. Increased proximity to the subway network is associated with a higher employment rate and hours of work; this association is especially strong for women.