Liberalizing Passenger Rail: The Effect of Competition on Local Unemployment

Ondrej Badura, Ales Melecky and Martin Melecký

MPRA Paper from University Library of Munich, Germany

Abstract: Competitive passenger rail can help workers access new or better jobs. This paper studies the wider economic impacts on local unemployment of the liberalized passenger rail between Ostrava, the third-biggest city in the Czech Republic, and Prague, its capital. The local impacts are estimated at the LAU 1 level (administrative districts) using the difference-in-differences method. The liberalization motivated the entry of two new private providers. The resulting competition in ticket prices, the number of connections, and service quality had a strong beneficial effect on labor market connectivity. It significantly reduced unemployment in the districts along the line compared with the control districts. The effect weakens with the level of urbanization of the treated district. It could partly transmit through higher firm entry and lower firm exit in the local market, as well as better skill matching on the back of higher inward and outward migration.

Keywords: Competition; difference in differences; districts; liberalization; local labor market; passenger transport; railways; unemployment; urbanization; EU country; OECD country (search for similar items in EconPapers)
JEL-codes: J6 L40 R10 R40 (search for similar items in EconPapers)
Date: 2022-01
New Economics Papers: this item is included in nep-lab, nep-reg, nep-tra, nep-tre and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Liberalizing passenger rail: The effect of competition on local unemployment (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:111651

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