This study was done in collaboration with the Dutch Ministry of Transport and the Dutch Railways.

A better railway connection between an economic centre and its periphery leads to a relocation of jobs from the periphery to the centre. However, the job flight comes along with a higher quality of living in the periphery and an increase in its population. The share high educated in the periphery rises.

These conclusions are based on a study of the effects of the existing railway connection between the city of Amsterdam and the area North of the city (see Figure). The two areas are divided by a canal; two railway tunnels and five car tunnels connect them to each other. We use model LUCA to compute where people would live and work in a situation without the railway tunnels, and compare this outcome to the current situation.

The new commuting link increases the number of people willing to work in the centre. Because the location is highly productive, companies move their offices there. Periphery thus looses jobs. However, the good accessibility of the jobs in the centre in combination with affordable housing makes the periphery an attractive location to live. This holds especially for high educated who are willing to commute larger distances. The population and the share high educated increase in the periphery. Regional differences become larger, but both regions gain from this. The welfare benefits due to relocation are large; they amount to 30% of the direct benefits due to travel time savings.

December 2017

Publications:

- Teulings, C.N., Ossokina, I.V. and H.L.G. de Groot, 2018, Land use, worker heterogeneity and welfare benefits of public goods, Journal of Urban Economics 103: 67-82.

- Ossokina, I.V., Groot, H.L.F. de, Ji, X. and C.N.Teulings, 2014, Agglomeratie, transportinfrastructuur en welvaart. (in Dutch), Policy Brief of CPB Netherlands Bureau for Economic Policy Analysis.