Suburbanization and transportation in European cities

We study whether highway and railroad improvements cause population suburbanization in Europe’s cities. We construct a unique population and transportation dataset covering 579 cities from 29 European countries for the period 1961–2011. In order to make a causal inference, we rely on historical instruments. Our average results indicate that highways, but not railroads, were responsible for the suburbanization process: each additional highway ray decreased the share of the central city population by 5 percentage points, whereas new railroads had no impact. The heterogeneity analyses provide evidence of different patterns based on the time of the investment, the city’s size and density, and its geographical location.