Do more transport opportunities lead to higher income? The effects of public transit access on transit-adjacent neighborhoods

This study investigates whether improved transit opportunities increase income of nearby residents by improving access to work opportunities. To explore this hypothesis, we employ a difference-in-differences model combined with matching to examine the effects of constructing a light rail transit line on median-household income for affected neighborhoods in the Twin Cities, Minnesota (Minneapolis and state capital St. Paul). We find increased income in "treated" neighborhoods and test whether that increase applies to "incumbent" residents (i.e., original residents pre-rail construction). The findings indicate a significant increase in median household income in neighborhoods close to the new transit line, as well as a decrease in the nonemployment rate, and some evidence of higher wages and longer working hours. We also appraise whether the new transit line led to gentrification, finding no evidence of either gentrification or neighborhood decline. These findings indicate that the increase in median-household income results from incumbent labor-market upgrading and supports the idea that improved transit access benefited many nearby residents. Yet, we find poverty rates are unchanged, suggesting that improved public transit is ineffective in helping the poorest, i.e., benefits are concentrated among those above the poverty line.