Highway expansions increase local economic activity | The Netherlands

In many countries, plans for highway construction and expansion meet fierce local protests, because of the expected negative effects from pollution, noise and spatial barriers. In this project we show that highway investments can also lead to positive effects for the local economy. Adding 10 km lane increases employment in the direct vicinity of the highway by 3 percent. This comes however at the cost of the employment further away.

Our results concern highway expansions, i.e. adding new lanes to existing corridors. This is relevant for the policy. Expansions – rather than construction of new greenfield highways – are the focus of current and future policies in many developed countries. The above figure shows that the total length of highways in the Netherlands grew with a factor 3 between 1960 and 1990 but did not increase substantially since. In contrast, the number of lanes – and thus the number of lane kilometres - kept steadily rising. This figure also shows future plans: the number of highways lanes, but not the highway length, is expected to keep growing in the coming years. Our results contribute to the ongoing public discussion about the local costs and benefits of highway investments.

July 2018


- Ossokina, I.V., Van Ommeren, J and H. van Mourik (2018) Highway expansions and local economic activity,, Discussion paper.