Highway infrastructure and state-level employment: A causal spatial analysis

This paper analyses the causal relationship between highway infrastructure and employment within the U.S. We estimate dynamic panel models in a vector autoregressive framework using time-series cross-sectional data on lane miles of roadway capacity and private sector employment for the 48 contiguous states over the period 1984-1997. The issue of spatial dependence is explicitly taken into account by means of a spatial filtering technique. Our analysis reveals evidence of employment growth temporally influenced by annual growth in the provision of major highways within the same state and all other states, as well as the other way around. However, the results show that the existence and direction of these temporal and spatial effects depend on the type of highways and time lags considered. Copyright (c) 2008 the author(s). Journal compilation (c) 2008 RSAI.