High-speed rail (HSR) is expanding rapidly and is often promoted as a fast and sustainable mode of transport. Our recently published article reviews a large body of theory and empirical evidence and shows that, while HSR can deliver substantial aggregate benefits, it also reshapes residential and employment patterns. These spatial reallocations are crucial for understanding who ultimately gains and who loses from new high-speed rail lines. We conclude by discussing the implications for the planned Dutch Lelylijn.
High-speed rail is on the rise
High-speed rail has expanded rapidly across the world over the past two decades. China alone has built a network exceeding 40,000 kilometres, more than the rest of the world combined, and continues to add new lines at scale. Europe has also seen steady expansion, with major networks in France, Spain, Germany, and Italy. Japan, the pioneer of high-speed rail, continues to invest in upgrades and new technologies, including an ultra-fast maglev connection. Taken together, global high-speed rail mileage now exceeds 60,000 kilometres, with many additional projects under construction or in planning stages
High-speed rail dramatically reduces travel times between cities and is one of the few low-carbon options for medium- to long-distance passenger transport. It is particularly attractive for business travellers, whose time is valuable and who rely on face-to-face interaction. A key but often overlooked feature of HSR is the presence of long-haul economies: the cost per kilometre rises less than proportionally with distance. This makes long trips relatively cheap and fundamentally distinguishes HSR from road transport.
Because of these features, HSR is not just a faster train. It changes the effective economic distance between cities, with consequences for firm organization, labour markets, housing demand, and commuting patterns.
What the evidence tells us
The paper highlights three main mechanisms through which HSR affects the spatial economy.
First, long-haul economies tend to favour large cities at the endpoints of HSR lines. When distance matters less, firms have weaker incentives to locate in intermediate places. Empirical evidence from Japan and China shows that smaller towns located between major hubs often experience employment losses after being connected to high-speed rail, as activity concentrates in the largest cities.
Second, HSR primarily reduces the cost of business travel, not the cost of shipping goods. This encourages firms to reorganize internally: headquarters and high-value functions become more concentrated in large cities, while routine production may be relocated or downsized elsewhere. Several studies document declines in employment in intermediate regions and a French study indeed shows organizational reshuffling after the extension of the TGV network.
Third, HSR can make long-distance commuting feasible. Workers may choose to live in smaller or cheaper cities while keeping jobs in large, productive urban centres. Evidence from France shows that this can increase population and housing demand in secondary cities, even when employment remains concentrated elsewhere. As a result, population and jobs do not necessarily move together.
Taken together, these findings imply that HSR often increases aggregate welfare but redistributes economic activity across space. It is not an investment that automatically benefits all connected regions.
What this means for the Dutch Lelylijn
These insights are highly relevant for the proposed Dutch Lelylijn connecting the Randstad with the northern Netherlands (see figure below), even though the project does not constitute a high-speed rail connection in the strict sense. A faster connection may well improve accessibility and reduce travel times substantially. However, the evidence suggests that intermediate cities along the route should not automatically be expected to gain employment.
Instead, a likely scenario is that some connected town, such as Emmeloord or Drachten, gain residents rather than jobs. If high-speed connections enable long-distance commuting, people may choose to live in the north while continuing to work in the Randstad. This can raise population, housing demand, and local amenities, even if employment declines.
For policy, this implies that expectations need to be realistic. The Lelylijn may stimulate population growth and increase residential attractiveness in intermediate regions, while at the same time reinforcing the concentration of employment in the Randstad; an outcome that does not seem to align with broader policy objectives.
Disclaimer: This story is auto-aggregated by a computer program and has not been created or edited by budgetbuddy.
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