The Sustainable Impact of High-Speed Rail Connection on the Local and Neighboring Regions’ Employment: Evidence from China

Abstract

This paper focuses on the role of high-speed rail (HSR) in promoting talent mobility and explores its heterogeneous impact in the employment distribution of local and neighboring regions. This empirical study uses data from 249 prefecture-level cities across the country from 2005 to 2018, combined with geographic spatial vector data. The results show that HSR connection significantly increases local city employment by 5.99%. This result is robust to a series of robustness tests. Heterogeneity results indicate that HSR connection has a significant positive effect on employment in eastern China and large cities, indicating a significant labor inflow from less-developed areas to more-developed areas. Moreover, HSR has a spill-over effect for employment in cities without HSR stations but within a 70 km radius. This spill-over effect is more salient for cities of medium size and in southern China. The mechanism analysis shows that the positive impact of HSR connection on employment mainly stems from the entry of new firms especially those in high-tech industries. This study not only highlights the important role of high-speed rail in promoting labor mobility and employment distribution but also provides strong evidence and insights on how to meet the demand for professionals in closed-loop system innovation and circular economy practices.