How buses alleviate unemployment and poverty: Lessons from a natural experiment in Clayton County, GA

Abstract

Many studies have documented the linkage between public transportation and economic outcomes, though there is relatively little empirical evidence on the consequences of losing existing transit services, especially bus services, which disproportionately serve low-income populations. We investigate the impacts of bus access on poverty and employment using a natural experiment in Clayton County, GA, where the local bus transit was terminated between 2010 and 2015. Using a difference-in-difference approach, we find substantial increases in poverty and unemployment rates in affected neighbourhoods during the five-year period. Our findings suggest both the spatial mismatch hypothesis, which predicts the reduction in transit access can lead to reductions in job accessibility and employment, and the residential sorting hypothesis, which states that poor households gravitate towards neighbourhoods with better transit access, could be at play. Overall, we find strong evidence that disruptions in bus transit could have significant adverse impacts on neighbourhood economic outcomes. Our findings underscore the need for federal and local public transportation funding to help improve job access, alleviate poverty, and maintain neighbourhood stability.