Job growth, accessibility, and changing commuting burden of employment centres in Melbourne

Abstract

How transport and employment agglomeration enhance urban productivity is a fundamental problem for many cities. Internationally, there has been a great deal of interest in the effect of employment concentration on urban productivity, but very few studies have examined its effect on worker commuting burdens and transport costs. This paper aims to advance international knowledge by measuring job growth and costs of labour market access between 2011 and 2016 for employment centres (EC) in Melbourne, Australia. A comprehensive transport cost model is used that incorporates detailed transport costs and travel times associated with transport modes. By tracking job growth and changes in worker commuting burdens, this paper distinguishes ‘high-cost’ ECs from ‘low-cost’ ECs, for their respective labour pools, and identifies which ECs offer opportunities for better transport outcomes. The results show that well-planned public transport (PT) systems and residential development, coupled with walking and cycle networks, are important features of ECs experiencing lower commuting burdens. Drawing upon the conclusions, this research recommends more effective approaches by governments to foster effective investments in urban infrastructure and discusses how broader policy and investment decisions can align to optimise employment agglomeration and minimise negative transport impacts.

Introduction

How investments in transport and clustering of employment enhance urban productivity is a fundamental problem for many governments seeking to improve economic performance while optimising infrastructure provision. At the metropolitan scale, the productivity of urban economies depends on how well our cities enable higher economic outputs by enhancing economic and business connections and linking jobs to worker capabilities (Garcia-Lopez and Muniz, 2011; Meijers, 2013). Enhancing urban productivity by supporting high levels of employment concentration and providing transport which connects jobs and workers in urban areas have been key strategies in many governments' spatial plans. The importance of an employment centre (EC) for economic growth is underpinned by its agglomeration economies and ability to offer productivity and human capital benefits for workers and business (Rauch, 1993). The transport system plays an important role as the infrastructure that links workers to jobs within spatial residential and employment locations (Daniels and Mulley, 2011).

Whilst there are economic benefits driven by enhancing employment and agglomeration in ECs, the ‘diseconomy’ effects of agglomeration have been frequently discussed in the urban economics literature. Congestion is an issue that causes delays, longer travel times, and higher land costs, causing declining productivity for business. Often, ECs offer capital intensity but create high commuting costs for workers seeking higher wages (Alpkokina et al., 2008). The high travel cost from residence to work imposes productivity frictions on individual workers, firms, and society generally via direct costs including car ownership and operation, public transport fares, travel time, provision of transport infrastructure, as well as indirect costs such as road congestion, greenhouse gas emissions, noise, accidents, and sedentary behaviour (Brooke, 1986; Koslowsky, 2000; Van Hooff, 2013; Emre and Elci, 2015; Holland, 2016). Therefore, how EC and transport systems can be better integrated to maximise agglomeration benefits, minimise transport costs to workers, and optimise infrastructure investment has been an important concern for many governments (Productivity Commission, 2017).

Internationally there has been a great deal of interest in the urban productivity gains from employment agglomeration (Ciccone and Hall, 1993; Fujita and Thisse, 2013). Yet studies of employment growth infrequently consider the higher commuting and transport costs that incur and potential effects that may negate the productivity gains of agglomeration (Proost and Thisse, 2015). Raising the productivity of ECs and transport systems has assumed increasing importance in many governments' growth strategies and infrastructure investment plans. Understanding the relationship between the benefits and transport costs of ECs to urban economies is particularly important to government investment decisions where funding and resources need to be used optimally (see BITRE, 2013). This paper aims to advance international knowledge by generating new insights into the relationship between the growths of ECs and worker commuting burdens in a large metropolitan area.

In this study, we provide a detailed analysis of the changing commuting burdens in terms of worker transport cost, travel time, distance, and energy cost relative to growth of ECs. As an emerging polycentric city, Melbourne, Australia presents an ideal case study for this research. The outputs of research provide new empirical knowledge to the existing literature to explore how job growth and concentration can change worker commuting burdens in a given urban context. It evaluates both successful and unsuccessful cases that ECs and transport infrastructure are integrated to enhance agglomeration, labour market access, and reduce commuting cost. Drawing the findings of empirical analysis, this research then recommends for more effective approaches by governments to foster effective investments in urban infrastructure and discusses how broader policy and investment decisions can align to optimise employment agglomeration and minimise negative impacts. The remainder of this paper is structured as follows: the second section discusses the function of ECs and transport issues; Section 3 and 4 describe the data and methods used to measure worker commuting burdens of ECs. Section 5 then analyses the results and examines the characteristics of ECs experienced a rise or decline in commuting burdens. The last section provides policy suggestions and highlights the directions for future research.