The Economic Impact of Public Transportation

Posted by Content Coordinator on Thursday, May 15th, 2014


Executive Summary

Objective. Public transportation services are important in many ways. They provide mobility, can shape land use and development patterns, generate jobs and enable economic growth, and support public policies regarding energy use, air quality and carbon emissions. All of these characteristics can be important when considering the benefits, costs and optimal investment levels for public transportation. This report focuses solely on one aspect – how investment in public transportation affects the economy in terms of employment, wages and business income. It specifically addresses the issue of how various aspects of the economy are affected by decisions made regarding investment in public transportation.

This report updates an earlier report – Economic Impact of Public Transportation Investment, prepared by Cambridge Systematics, Inc. and Economic Development Research Group, for the American Public Transportation Association, 2009.

Key findings are organized in terms of three categories: (1) longer-term effects of investment in public transportation, which enables a variety of economic efficiency and productivity impacts to unfold as a consequence of changes in travel times, costs and access factors; (2) the effects of spending money on public transportation, which creates immediate jobs and income by supporting manufacturing, construction and public transportation operation activities; and (3) conclusions regarding the interpretation and policy consideration of economic impacts associated with public transportation investment.

Overall Findings

Increased public transportation investment can lead to significant economic growth, as a consequence of both the short-term stimulus impact of public transportation outlays and a longer-term, cumulative impact on economic productivity. The latter is enabled by increasing investment to improve our nation’s urban transportation systems and sustaining the investment  over time. While the total impact will depend on the level and distribution of investment, the magnitude of potential impact can be illustrated by considering a scenario of enhanced investment sustained over 20 years.

Under such a scenario of sustained higher investment in public transportation, the impact by the end of the 20-year period would represent a ratio of more than $3.7 billion per year of additional GDP per $1 billion invested annually. This includes $2.0 billion due to the productivity effect of cost savings in the economy and $1.7 billion supported by the pattern of public transportation investment spending. At current wage rates, this is equivalent to a ratio of approximately 50,731 jobs per $1 billion invested in public transportation.

Potential Long-term Economic Impact per Billion Dollars of Enhanced National Investment in Public Transportation (Annual Effect in the 20th Year)*

Download full version (PDF): The Economic Impact of Public Transportation

About the American Public Transportation Association
To strengthen and improve public transportation, APTA serves and leads its diverse membership through advocacy, innovation and information sharing. APTA and its members and staff work to ensure that public transportation is available and accessible for all Americans in communities across the country.

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