Motorways, urban growth, and suburbanization

May 20, 2021

Portugal moved from having less than 200 km of motorways before joining the European Union in 1986 to having, according to the Eurostat, the fifth highest endowment of motorways relative to population in 2017, and the third relative to GDP in the Union. This paper studies the relationship between the expansion of the Portuguese motorway network between 1981 and 2011 and the growth of population and employment across mainland municipalities.

Since the spatial distribution of transport infrastructure is not random, the paper uses instrumental variables based on historical transport networks to address the endogeneity of the geography of motorways. More specifically, the instruments are based on a map of (mainly dirt) roads in 1800 and the main roads of the National Road Plan of 1945.

The findings suggest that, on average, new motorways caused large increases in both population and employment. This effect, however, is not homogenous. In line with existing evidence for other countries, e.g. the US and Spain, the paper finds that motorways contributed to suburbanization, as the impact of motorways on population growth (but less on employment growth) is particularly strong in the suburban municipalities of the metropolitan areas of Lisbon and Porto. In addition, motorways also appear to have influenced urban agglomeration dynamics: the effect on population growth is stronger for those municipalities that already had a larger population in 1970.

Click here to go to the paper by Bruno T. Rocha, Patrícia C. Melo, Nuno Afonso, and João de Abreu e Silva.