We study the effects of a free-fare transport policy implemented by Brazilian localities on employment and greenhouse gas emissions. Using a staggered difference-in-differences approach, we find that fare-free transit increases employment by 3.2% and reduces emissions by 4.1%, indicating that transport policies can decouple economic activity from environmental damage. Our results are driven by workers transitioning from higher-emission to lower-emission sectors instead of being driven by a decline in private transportation use. Cost-benefit analyses suggest that the costly policy only presents net benefits after considering the tax inflows of the increased economic activity and the benefits of reduced carbon emissions.
@article{arxiv.2410.06037,
title = {Free Public Transport: More Jobs without Environmental Damage?},
author = {Mateus Rodrigues and Daniel Da Mata and Vitor Possebom},
journal= {arXiv preprint arXiv:2410.06037},
year = {2024}
}