Highway Infrastructure Investment And Job Generation

Construction and related activities financed through the Federal-aid program are important sources of employment for persons in many industries throughout the economy. A diverse work force representing all skill levels is supported by investment in highway construction activities, and subsequently in industries which supply materials to the highway construction industry and in other industries throughout the economy.

To inform debate on a new transportation bill being considered, the authors review the literature on the economic outcomes of highway infrastructure spending, which constitutes the largest share of federal spending on transportation infrastructure. They highlight the connections between highway spending and the economy and then analyze the literature to trace the effects of highway infrastructure on productivity, output, and employment.

Policy makers often call for increased spending on infrastructure, which can encompass a broad range of investments, from roads and bridges to digital networks that will expand access to high-speed broadband. Some point to the near-term macroeconomic benefits, such as job creation, associated with infrastructure spending; others point to the long-term effects of such spending on productivity and economic growth. Economic Analysis and Infrastructure Investment explores the links between infrastructure investment and economic outcomes, analyzing key economic issues in the funding and management of infrastructure projects. It includes new research on the short-run stimulus effects of infrastructure spending, develops new estimates of the stock of US infrastructure capital, and explores incentive aspects of public-private partnerships with particular attention to their allocation of risk. The volume provides a reference for researchers seeking to study infrastructure issues and for policymakers tasked with determining the appropriate level and allocation of infrastructure spending.

Given that transportation has been, and will continue to be, a central piece of every state's economic development (and budget), the transportation choices made now have implications on jobs far into the foreseeable future. There is general agreement among the public, transportation professionals, and elected officials that our transportation infrastructure is in bad shape and needs repair and reinvestment. As the nation grows, we will always need some new road capacity; few argue that all infrastructure must be brought up to standard before any new capacity is added. Choices about spending priorities come down to determining the right balance of repair and expansion. Many of the reasons to increase investment in our existing roads and bridges have been articulated elsewhere, including the short-term and long-term costs of neglecting repair, which substantially increases costs. The situation with public transportation investments is similar. The question is the right balance between modes in an era of growing demands and shrinking budgets. The findings in this report add an additional reason to increase investment in repair of all kinds, and in public transportation capacity: each type of investment creates far more jobs.