Join the Movement

Members of Voices for Public Transit know public transportation benefits everyone. We’re keeping it moving.

Join the Movement

Members of Voices for Public Transit know public transportation benefits everyone. We’re keeping it moving.

« Back to the Blog

#InvestNow: The Economic Benefits of Investing in Public Transportation

We’ve already looked at the high cost of short-term funding and the growing efficiency of public transportation.

Now we’re taking a look at the significant economic returns that come from investing in public transportation.

Does public transportation investment actually spur economic development, create jobs, and help household budgets? The answer is a resounding “Yes!”

The Value of Workforce Concentration

Studies show that when public transportation brings people together—in a city center or town hub—jobs cluster, resulting in higher wages and productivity. This hidden value of workforce concentration—technically called “agglomeration”—ranges from $1.5 million to $1.8 billion annually, depending on the size of the city or town, according to one comprehensive study.

On average, a 10 percent expansion in public transit services—rail or bus—produces measurable wage increases in city centers and results in a one- to two-percent increase in the local economy. These findings—based on analysis of more than 300 U.S. metropolitan areas—show that investing in public transportation services makes financial sense for regions of virtually any size.

Accessible public transportation and agglomeration also drive private investment in communities. In recent years, billions of dollars have been invested in business districts, residential communities, office buildings, and sports facilities along public transit lines. For example, Tucson’s new Sun Link streetcar garnered $1.5 billion in investment along the system’s route—even before service began.

Controlling Household and Business Costs

By reducing roadway congestion and automobile use, public transportation translates into cost-savings for households. Households become more productive and spend less on fuel and automobile maintenance. All told, these benefits result in increased household purchasing power of $18.4 billion per year. In the best of circumstances, a robust public transportation system can enable households to reduce their car ownership—e.g., from owning two cars to one. This can save a household more than $10,100 per year.

Businesses also save money when public transportation infrastructure is improved. Reduced roadway congestion speeds operations and delivery times, making businesses more productive and efficient. The U.S. Department of Transportation estimates the cost of congestion for freight transportation is now approaching $200 billion annually for all types of transportation. With freight tonnage projected to increase by 62 percent by 2040, it is critical to invest in public transportation to mitigate roadway congestion.

Economic Return Per $1 Billion Invested

2014 study conducted by the Economic Development Research Group determined that every $1 billion invested in public transportation would on average result over 20 years in the following benefits:

  • 50,731 jobs created
  • $3.7 billion economic impact (gross domestic product/GDP)
  • $642 million in tax revenue

Let’s Bring this Evidence to Congress!