Does transport infrastructure development inhibit firm-level employment fluctuations? Evidence from national expressway construction in China

Abstract

Employment Stabilization has always been a key focus of the Chinese government's work. Exploring the influencing factors of employment stability is of great significance for promoting the realization of high-quality employment. Based on the manually collected national expressway data and the China Industrial Enterprise Database from 1998 to 2015, this paper conducts an empirical study on the impact of transportation infrastructure development on enterprise employment fluctuations using the multi-timepoint difference-in-differences method. We find that the development of expressways has a significant inhibitory effect on enterprise employment fluctuations. Compared with areas where expressways have not been opened, the opening of expressways reduces local enterprise employment fluctuations by approximately 0.9 %. The development of expressways affects the demand side or supply side of the enterprise labor force through market scale effects, labor allocation effects, etc., thereby influencing enterprise employment fluctuations. The impact of expressway development on employment fluctuations of enterprises with different ownership natures, different economic regions, and different scales varies to some extent. Finally, this paper proposes relevant policy recommendations, providing practical and effective references for coordinating and promoting the goal of Employment Stabilization under the background of the strategy of building a strong transportation country.