Labour Productivity Gains from the "Greater Paris Express" Rail Project

Présentation de Miren Lafourcade - PSE, Université Paris Sud Saclay

Miren Lafourcade

Abstract :
This paper provides an estimation of the changes in workers' earnings and firms' value-added arising from the ``Grand Paris Express'' rail project in France. This large transport investment (€29 Bn) is expected to create around 115,000 jobs adding to the natural growth of the Paris region over 2016-2030, and to generate long-run time savings between Parisian suburban areas. We monetize the static and dynamic agglomeration economies conveyed by these job creations and time savings, under different migration responses to the project and under different skill endowments of movers. In the most optimistic case, if jobs created by the metro were filled by people without prior activity in France, the project would benefit all local labour markets and generate an overall yearly value-added of more than 16 billion euros, compared to the baseline scenario without metro. By contrast, if they were to be filled by people who would have been employed otherwise outside the Paris region, departure labour markets could incur potentially large losses triggered by either workers moving out (extensive margin) or agglomeration diseconomies affecting stayers (intensive margin). In the most pessimistic case, the overall impact of the metro could melt up to around 4 billion euros per year.