Mobility, segregation and inequality: Who gains from urban transportation improvements?

Urban transportation projects are massive public investments that can transform cities. This article reviews evidence on how these projects shape where people live, and how their benefits are shared across income groups. A simple model helps organize the findings. Three factors are especially important: who uses the new transportation mode, where it is built, and how easily people can relocate. Projects serving a narrow group in a specific area tend to increase segregation and inequality. These impacts can be severe if poorer households face barriers to relocation, as happened with the Interstate Highway System. Projects with broad spatial coverage and use by all income groups, like Bus Rapid Transit in developing countries, tend to have more modest segregation effects and broadly shared welfare gains.