A Proposal to Evaluate the Labor Market Consequences of an Extension of the San Francisco Bay Area's Commuter Rail System

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This project uses an extension of the San Francisco Bay Area's rapid transit system as a natural experiment for testing several competing hypotheses concerning the underlying mechanisms of spatial mismatch in urban labor markets. In April of 1997, the area's commuter rail system extended services to a rapidly growing suburban community along the eastern ring of the Oakland Primary Metropolitan Statistical Area. The service extension provides a direct public transit link between the predominantly white city of Dublin and the large black, Hispanic, and Asian communities of Hayward, San Leandro and Oakland where a link did not exist previously. Most importantly, the service extension will connect the portion of the metropolitan area with the highest unemployment rate and lowest earnings to a region with employment rates and earnings that are substantially above the metropolitan area average. Interviews of employers within and around the Dublin area will be conducted immediately before and a year following the opening of the new Dublin Station. Through questions concerning the racial composition and area of residence of recent applicants and new hires, as well as questions concerning skill requirements, screening, employer search behavior, and other firm characteristics, the firm-based surveys will be used to analyze several of the underlying mechanisms that are often offered as explanation of spatially segmented labor markets. Specifically, application rate data will be used to test for supply side responses on the part of inner-city minority workers that result from the extension of public transit services. Questions concerning employer hiring and search practices will be used to analyze the firm responsiveness to and determinant of supply-side changes induced by the transportation extension. Two sets of treatment and control groups will be constructed. In the first set, changes in the responses of employers located in the city of Dublin will be compared to changes in the responses of employers located in neighboring suburban communities. In the second set, treatment will be defined continuously in terms of physical distance to the new commuter rail station. This project will provide direct information concerning the ability of public transportation policy to alleviate inner-city joblessness. Given recent changes in federal welfare policy and the disproportionate concentration of welfare recipients in U.S. central cities, information is needed concerning policy that can better integrate urban and suburban labor markets.