The Impact of Public Transportation and Commuting on Urban Labor Markets: Evidence from the New Survey of London Life and Labour, 1929-32

The growth of public transport networks in the late-nineteenth and early-twentieth centuries had profound effects on commuting in the industrialized world, yet the consequences for labor markets during this important period of historical development remains largely unstudied. This paper draws on a unique dataset combining individual commuting and wage information for working-class residents of London, circa 1930, to analyse, for the first time, the nature of and returns to commuting shortly after when networks were first built. A sizeable majority of working-class Londoners worked within a short walk of their residence in 1890. By 1930, over 70 percent commuted at least one kilometer. Commuting allowed workers to search for jobs over a wider geographic area and across a larger number of potential employers. This, in turn, potentially increased workers’ bargaining power and improved employer-employee matching. We show that wage returns to commuting were on the order of 1.5-3.5 percent per kilometer travelled. Access to public transport increased both the probability of commuting and distance commuted but had little or no direct effect on the probability of being employed or on earnings. We argue that these results are consistent with a search and matching framework; commuting led to workers finding jobs more suited to their skills and to better matches with employers. We also provide descriptive evidence from contemporary sources to describe the impact of commuting on improving quality of life by reducing urban crowding.