Propensity score matching–difference-in-differences analysis of the casual effect of opening intermediate high-speed railway stations on employment status in surrounding municipalities

Abstract

High-speed rail (HSR) has supplanted traditional rail as the dominant mode of intercity transportation due to its superior speed, punctuality, and convenience. However, the specific impacts of HSR development on municipalities surrounding intermediate stations remain insufficiently understood, particularly with respect to employment structures and local economic outcomes. This study employs propensity score matching to account for diverse characteristics of target municipalities, and combines this with a difference-in-differences framework to quantify the effects of HSR development. The results reveal clear regional heterogeneity: in less urbanized areas with higher shares of primary and secondary industries, HSR development is associated with declines in the secondary sector and growth in the tertiary sector. In contrast, in more urbanized regions, competition or substitution effects in the tertiary sector may limit such gains. Overall, while HSR construction can facilitate structural shifts toward tertiary sector-based economies, it does not consistently increase employment rates in municipalities surrounding new stations and may even contribute to higher unemployment in some regions, underscoring the need for regionally tailored development policies.