Disentangling the role of cars and transit in employment and labor earnings

We examine the relationship between transportation access on the one hand and individuals’ employment and labor earnings on the other. We improve on existing studies by bringing a large national panel data set to bear on this question, attempting to disentangle the mechanisms by which individuals improve their economic standing and, finally, comparing the economic benefits to the direct costs of car ownership. To do this, we use nine waves from the Panel Study of Income Dynamics from 1999 to 2015. We find that access to a car is a strong predictor of future economic benefit for individuals, and that at very high levels of transit access, carless individuals can also fare equally well. Access to an automobile is strongly associated with employment, job retention, and earning more money over time. Though having a car is associated with economic benefits, owning and operating a car is expensive; yet, our findings suggest that the benefits may outweigh the costs for most people living outside neighborhoods with truly excellent transit service.