High-Speed Rail: a panel data impact evaluation by Municipalities on depopulation and unemployment

Abstract

The research is focused on the impact of High-Speed Rail (HSR) by Municipalities on population density and unemployment, based on economic and demographic variables of Spain. For that purpose, we construct a panel for a 15-years period (1998-2012) where the treatment variable HSR takes the value of 1 when the municipality is within an area of 10 km from the train station, allowing for the size of the municipality to interact with HSR. Two different samples are considered: all the municipalities and by HSR corridors.To evaluate the transport service impact, a Difference in Difference technique is applied to different model specifications to isolate the HSR effects, after controlling for relevant variables. A simultaneous equation panel data model is estimated, equation by equation by ordinary least squares and by dynamic ordinary least squares, with robust empirical results. Reallocation effects on the population are observed in the national sample, with positive effects on small cities and little municipalities (20,000 people). Only the South and North corridors show positive net results on population density. With respect to unemployment, the effects are not so clear. At the national level, only small municipalities (<10,000 people) are positively affected. From a corridor perspective, only the South corridor shows net reduction results in terms of unemployment.