Investigating the Impact of Transportation Investment on Job Creation through Induced Economic Production

In this study, the direct and indirect effects of transportation sector investment on the creation of value-added and jobs in the economy were studied. For this purpose, after estimating the relationships using ARDL method for the period of 1959-2014, the short-run, long-run, and error correction models estimated. In long-run estimation, the production elasticity of transportation sector relative to the capital is more than twice as large as non-transport sectors. According to these results, and the finding that 1 percent increase in the total value-added leads to 0.3 percent growth in the job creation in the economy, the effect of transport sector investment on the creation of total value-added and jobs reviewed. The results of the shock scenario simulation in the transport sector investment showed that one percentage increase in this variable generated an average of 0.235% growth in the economic value-added and a 0.07% increase in the number of created jobs during the simulated period. According to the nearly 10% share of transportation on the total value-added, this shows a significant effect. Therefore, given the significant effects of transportation in the economy, this sector has the relative ability to develop direct and indirect employment from the channel of production boost.