Transit finance, growth, and equity: a dynamic panel analysis on the effect of transit revenues on low-skilled employment

We examine the relationship between public transit finance, economic growth, and equity. This is the first study to analyze the long-term effect of transit operation revenues on employment growth for all workers and low-skilled workers. We use state-of-the-art dynamic panel data techniques to analyze municipalities covered by 26 transit agencies in the US state of Ohio. We find that both government subsidies and fare revenue, indicators of transit system improvement, have a positive impact on overall jobs. An increase in government subsidies by $10 per capita results in a 1.1% increase in overall jobs in the same year. The local jobs also grow by 4.6% when fare revenue is increased by $10 per capita. In addition, fare revenue has a positive impact on the number of low-skilled jobs both in current and future years. A one dollar increase in fare revenue per capita grows the number of low-skilled jobs by 1.3% in the same year and 0.4% in the next year.