May/June 2002
Do
Better Roads Mean More Jobs?
by Ellen
Schweppe
If you
build a highway, jobs will come.
Well,
maybe—so how do transportation planners predict whether a highway
project will boost an area's economy? Some studies show links between
better roads and more jobs. But most often planners lack the data
they need to determine whether proposed projects will actually produce
desired economic benefits, according to Martin Weiss, who has studied
the issue for the Federal Highway Administration (FHWA) for nearly
a decade.
Planners
are turning to FHWA for the answers they need.
The economic
benefits of highway improvements have long been a subject of debate.
Proponents of highway investment point to such expected paybacks as
job creation, income growth, and business expansion. Opponents argue
that new roads merely increase traffic to the detriment of the environment
and redistribute jobs without creating net economic benefit. In fact,
Weiss maintains, too little research has been done to develop a base
of information that can be used to project the economic effects of
individual highway proposals. In addition, too little research has
been done to assess the quality of life and other environmental issues
related to the economic development impacts.
FHWA
is working on several fronts to develop information that the transportation
community can use to make better decisions on highway projects aimed
at economic expansion. The efforts include before-and-after-studies
of projects to determine the effect of highway improvements on local
economies, as well as prospective studies to find out what motivates
sponsors of highway projects.
"Completing
these studies will help us understand the mechanisms by which different
types of highway improvements actually result in growth," says
Weiss, principal program official for FHWA's National Corridor Planning
and Development and Coordinated Border Infrastructures (NCPD/CBI)
programs and the Economic Development Highways Initiative. "Once
we know the mechanisms, we think we can better sort economic development
proposals into those that are `very promising,' `promising,' and `other.'
" And planners can use the results to make investment decisions.
What
about statewide planning? Factors such as traffic commute patterns?
If we can sort the proposals, planners can make better investment
decisions, and statewide plans and programs can be better supported.
Eventually, traffic projections, particularly those related to commuting
and tourism, can be more accurate.
Highway
projects that fall into the economic development category are those
that are expected to result in a sustained increase in employment
or an increase in wages, profits, sales, and similar indicators—but
are not justifiable by traffic.
"Funds
that go into such projects may not be a large percentage, but it's
not an amount to be sneezed at, particularly if State planners can
improve on how it gets spent," says Weiss.
Many
local, State, and regional transportation officials agree. Elected
officials are turning to FHWA for advice and funding on highway economic
development with increasing frequency. Sometimes four or more high-level
delegations visit FHWA headquarters in a single week.
"People
are struggling to put together impact studies," says Weiss. "They
don't really know what to say about whether a project will or won't
accomplish economic development. There's a potential to develop valuable
information for transportation planning."
The
Better Roads-More Jobs Connection
Studies
starting back in the era of interstate construction demonstrated a
connection between highway improvement and economic growth. A 1970
study that looked at employment trends between 1958 and 1963 found
dramatically higher job growth in urban areas with interstate access.
A 1980 report on the impact of the interstate system on rural areas
found similar results.
By the
1990s, new interstate construction had slowed, making the continued
usefulness of the earlier research questionable. Four regional studies,
however, shed light on the relationship between transportation improvement
and economic development. Two of the studies focused on the 13-state
Appalachian region.
The first
Appalachian study looked at counties with per capita incomes of less
than two-thirds of the national average to see which of them succeeded
in climbing out of the low-income category between 1969 and 1993.
West Virginia and
Kentucky
exhibited relative lack of success compared to other states. The study
identified several reasons, two of which relate to highways: The low-income
counties in those two states were more distant from metropolitan areas
than low-income counties in other states, and scheduled highway improvement
projects in the two states had not yet been completed.
The other
Appalachian study compared income growth in 391 counties with demographically
similar counties outside the region. The study showed that per capita
income increased 17 percent more in the Appalachian counties than
in their counterparts. But the increase was 32 percent greater in
counties with at least 3 miles (4.8 kilometers) of new highways constructed
under the Appalachian Development Highway Program.
The other
two studies concentrated on the seven-state lower Mississippi Delta
region.
The first
of these studies, coordinated by Weiss, was a follow-up to a 1988
report by the congressionally appointed Lower Mississippi Delta Development
Commission. The report included 55 recommendations on transportation
improvement, most of which were highway-related. Between 1990 and
1995, nearly all of
the highway recommendations were at least partially implemented. During
the same period, counties and parishes in the region outperformed
the rest of the nation in relative job growth.
A follow-up
to the Delta study looked at how much of the increase in employment
in seven rural counties and parishes with rapid job growth could be
attributed to transportation improvements. Through a series of focused
interviews, researchers concluded that as much as
40 to 65 percent of job growth was attributable to transportation
improvements.
More
recently, Weiss looked at job growth in Laredo, Texas, after the new
World Trade Bridge linking the city with Nuevo Laredo, Mexico, was
opened to traffic in 2000. The bridge project, partially funded under
FHWA's NCPD/CBI programs, was designed to alleviate congestion and
eliminate a major bottleneck to commercial traffic between Mexico
and the United States.
From
1999 to 2001, Laredo gained about 4,400 jobs, and its unemployment
rate dropped 1.4 percent. During the same period, both the Texas and
U.S. economies lost momentum, with the State's unemployment rising
0.4 percent and the national rate increasing 0.7 percent.
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The
World Trade Bridge in Laredo, Texas, was opened April 15, 2000.
Traffic backups disappeared, and jobs were created.
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"This
is a particularly good example that shows the benefits of highway
improvement to job growth in an urban area," Weiss says. "Not
only were a lot of real jobs added during a time when the economy
was going downhill, a lot of them were transportation-oriented, and
the jobs went to an urban area with historically high unemployment."
In May 2002, Miguel A. Conchas, the CEO of the Laredo Chamber of Commerce,
said the reason was that "
the opening of the bridge breathed
new life into Laredo's tourism and retail industries as it returned
Laredo's downtown bridges to regular traffic use. Shoppers, school
children, visitors, and commuters, all are able to make use of these
bridges without the worry [about] the congestion that was brought
about by intermixing with commercial traffic, i.e., tractor trailers."
FHWA's
Three-Pronged Plan
Despite
the contribution of past studies to understanding of the link between
better roads and more jobs, planners need more and better information
to determine whether future projects will yield the same benefits,
Weiss says.
"At
this point, we don't know enough to make confident judgments regarding
economic development outcomes for use in developing transportation
improvement programs, transportation plans, or environmental documents,"
he wrote in a 1999 report on economic growth from transportation improvements.
He went
on to note that completing the plans will require "decision-brokering
tradeoffs" between improvements in different jurisdictions. Different
kinds of transportation improvements, maintenance projects, and increased
capacity projects also require tradeoffs, as do "projects that
support different, sometimes contradictory, regional goals."
A significant
problem for planners is that they often must rely on computer economic
models or assumptions that lack a basis in empirical analysis. The
models may not produce accurate predictions of whether a particular
project will produce expected economic results.
"Computer
models can be useful, but they also can be manipulated, and it's difficult
to figure out what has
been done," says Weiss. "The most difficult assumption to
deal with is the tooth fairy assumption that money drops out of the
sky to be used on highway improvements. But it comes from taxpayers.
We need to work on building realistic predictive methodology instead
of digital fiction."
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Local
residents refer to much of the area near U.S. Route 80 in Alabama
as the "Blackbelt," as shown on the sign of this hunting
club. FHWA's study in this corridor is looking at improvements
that could foster industrial parks and tourist attractions.
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First
Prong: Economic Development Highways Initiative
The first
of FHWA's three-pronged effort to create better data is the Economic
Development Highways Initiative. Congress directed FHWA to launch
the initiative in the House/Senate conference report on the U.S. Department
of Transportation's (DOT) 2000 Appropriations Act.
The report
cited the Mississippi Delta Region study, saying that Congress was
interested in "recent studies that demonstrate the degree of
new and sustainable economic development generated by new or substantially
improved highway facilities through economically disadvantaged regions."
Under
the initiative, researchers are studying potential economic development
around highway corridors in 12 areas—two each in Alabama, California,
and Louisiana, as well as one each in Montana, North Carolina, Pennsylvania,
South Dakota, Texas, and West Virginia. The studies, scheduled for
completion in spring 2003, are being carried out in consultation with
advisory committees in each state that include local and state officials
and representatives from FHWA division offices.
The studies
are designed to refine FHWA's understanding of the economic potential
of specific highway corridors. In a study of U.S. 80 in Alabama, for
example, major issues for stakeholders include improvement to the
corridor to help generate local industrial parks and tourist attractions
near major urban areas. In a similar study of U.S. 43 in Alabama,
Mayor Austin Caldwell of Demopolis, Alabama, said at a January 2001
stakeholder meeting, "If we do not improve this highway, the
future will be like the past,
and a lot of people will be driving
around looking and wondering where their next job will be. If we improve
the highway, we can save our employers and have more of them."
In Texas, stakeholders want to identify how planned improvements to
U.S. 83 in Dimmit, Webb, and Zavala counties may set the stage for
economic development in those areas.
Researchers
also hope to generate data that FHWA can use in analysis of future
legislative proposals relating to
economic development highways and the impact of highway improvements
on economic growth, interstate commerce, and the regional availability
of well-paying jobs.
Second
Prong: Guidelines for Before-and-After Studies
A second
FHWA effort is aimed at improving the methodology used to gather information
about the economic impacts of local highway improvements. To accomplish
that goal, FHWA sponsored a 2001 study to develop detailed guidelines
for States and localities to use in conducting before-and-after studies
of highway improvements.
"Local
studies are valuable because most projects these days are built at
that level," says Weiss. "We're building small sections
of highways, not the multimile interstates of yesterday."
The principal
researcher for the 2001 study was Glen Weisbrod of Economic Development
Research Group (EDRG). He and others from EDRG, Cambridge Systematics,
Inc., the Appalachian Regional Commission, and the Virginia and Wisconsin
departments of transportation consider the study a starting point
in equipping FHWA and transportation planners with consistent, believable
data on how and under what circumstances
highway improvements can provide desired economic development.
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The
Ogalla Sioux Indian Nation constructed this historic marker on
the Pine Ridge Reservation in South Dakota, subsequently substituting
the word "massacre" (which by consensus of historians
is a more accurate description) for "battle." FHWA's
Economic Development Highways Initiative is studying the impact
of highway improvements in the Pine Ridge area on access for visitors.
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The resulting
"Guidelines for Data Collection and Analysis" outline best
practices for conducting before-and-after analyses of three types
of highway projects: multi-county corridor, multi-town corridor, and
one-town corridor. FHWA plans to provide funding for two local studies
based on the guidelines. The agency also is
encouraging other localities to use
the guidelines when planning before-and-after studies on highway
projects.
"Dozens
of before-and-after studies have been done, but they didn't use this
methodology and are therefore not as helpful," says Weiss.
Once
a sound information base is built, planners will be able to use it
in several ways. The results will help planners better understand
how various factors, including highway investment, interact to stimulate
economic development. The findings also can be used to develop and
improve economic forecasting models. Planners can apply results from
a specific project to determine the potential benefits of a planned
project with similar characteristics.
Third
Prong: Systemic Observation
In addition
to prospective and before-and-after studies, the third prong is FHWA's
systemic observation of transportation improvement projects that have
had an effect on economic growth. FHWA's look at the impact of Laredo's
World Trade Bridge was the first in the series, which will include
observations of projects funded by the NCPD/CBI programs, as well
as projects on congressionally
designated High Priority Corridors.
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Improving
tourist access to the natural beauty and cultural attractions
of Pine Ridge Indian Reservation, South Dakota, could help generate
much-needed income and jobs.
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The information
gained is expected to advance FHWA's knowledge of which projects can
contribute the most to economic development.
That, in turn, could lessen some of the controversy about the issue
of economic development highways.
"Some
past economic development projects were generally considered to have
been pork barrel, but there was no way to prove it or even test it,"
says Weiss. "If we can separate the
snake oil from the worthwhile projects, it can help a
lot."
Better
information about prospective economic development highways also may
help planners address the concerns of groups opposed to building new
roads.
Generating
a database of information on economic development highways is an ongoing
process for FHWA. Agency experts plan to develop reports and position
papers on the
topic for use as a resource during DOT's 2003 reauthorization process.
"We
think we can provide information that could be extremely useful in
decision-making on funding future highways," says Weiss. "We
can make this a more scientific, more efficient, less random process."
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A
stakeholder group comprised of State and local officials and representatives
of Tuskegee University will advise FHWA as the corridor study
for Economic Development Highways Initiative progresses.
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Ellen
Schweppe is a contract writer for FHWA.
Martin
Weiss has been with FHWA since 1974 in a variety of field and
headquarters assignments. Since 1993, he has been involved with multistate
and multijurisdictional studies and economic development aspects of
planning. He wrote the NHS report to Congress in 1993. His work on
a lower Mississippi Delta highway and economic development study became
nationally regarded. Since 1997 he has been the liaison for FHWA in
the Latin America Trade and Transportation study, a multistate and
multimillion dollar effort. Since 1998 he has been the principal program
official for the National Corridor Planning and Development and the
Coordinated Border Infrastructure discretionary programs, the highest
annual dollar value discretionary program in FHWA. Since 2000 he has
been the principal program official for the economic development highway
initiative.
Other
Articles in this issue:
Arizona Tackles Work Zone Delays
A Hallmark of Context-Sensitive Design
Safer Roads Thanks to ITS
Do Better Roads Mean More Jobs?
Exciting Opportunity for ITS Work
See It Before It's Built
Roadway Lighting Revisited
The Man Who Loved Roads
Benefitting
from LTPP—A State's Perspective