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Abstract: I quantify the effect of U.S. Interstate Highway System on suburbanization. I leverage variation in highway construction dates and driving time reductions to show that new highways affect both commute costs and trade costs. I find that, on average, a rise of one standard deviation in market access raises population and employment by about 10 percent after 40 years. However, a rise of one standard deviation in commuting access raises population and employment by about 1 percent after controlling for market access changes. I develop a quantitative model of trade, commuting, migration, and scale externalities, and map it to the reduced-form estimates. Using the calibrated model, simulations show highways account for 15 percent of suburban growth and 33 percent of the decline in urban cores. I find that suburbs developed and urban cores declined not only because of reduced commute times, but also, because of trade costs reductions.