Airport delays and metropolitan employment

Abstract

AbstractThis study provides the first empirical assessment of the impact airline delays have on urban employment. While previous works have suggested that road congestion can slow down regional development, the influence of air traffic delays on metro‐level jobs has not been examined comprehensively. The present study uses a nine‐year panel of quarterly data, which covers passenger airline traffic and delays at airports across urban areas in the United States. The panel also includes data on total and industry‐specific employment at the metropolitan‐area level. Our empirical estimates of the impact of air traffic on total employment are comparable to previously reported measures in the literature. However, we find that service‐sector employment is less sensitive to air traffic than other studies suggested. We provide new evidence confirming that delays have a negative effect on employment, a finding that is robust to various specifications of our empirical model. Our results indicate that a 10 percent increase in the number of delayed flights leads to up to a 0.15 percent decrease in total and service‐sector employment, a 0.47 percent decline in leisure and hospitality employment, and a 0.7 percent reduction in the employment level of goods‐producing jobs.