The structure of the labor market, telecommuting, and optimal peak period congestion tolls: A numerical optimization model
AbstractThis paper extends a standard model of welfare optimal peak-period congestion tolls to take into account two characteristics of typical European labor markets, viz. wage bargaining and the increasing potential of telecommuting as an alternative to working on-the-job. Specifically, we consider the government's problem of determining optimal labor and peak-period transport taxes under two different labor market structures, viz., a competitive labor market and a wage bargaining setting. The models include commuting and non-commuting transports, and they allow for telecommuting. We implement the models numerically using Belgian data. Results include the following. First, if union preferences reflect the transport concerns of their members, we find that optimal congestion taxes under competitive labor market conditions exceed those under bargaining by 10-17%. Second, the combination of substantially higher transport taxes and lower labor taxes compared to the reference situation jointly implies that the optimal tax structure strongly stimulates telecommuting for both labor market structures considered. Third, it is found that improving the efficiency of telecommuting results in a considerable reduction of optimal congestion tolls.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Regional Science and Urban Economics.
Volume (Year): 41 (2011)
Issue (Month): 5 (September)
Contact details of provider:
Web page: http://www.elsevier.com/locate/regec
Congestion taxes Competitive labor markets Wage bargaining Telecommuting;
Other versions of this item:
- DE BORGER, Bruno & WUYTS, Bart, 2010. "The structure of the labour market, telecommuting, and optimal peak period congestion tolls: A numerical optimisation model," Working Papers 2010013, University of Antwerp, Faculty of Applied Economics.
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- de Graaff, Thomas & Rietveld, Piet, 2007. "Substitution between working at home and out-of-home: The role of ICT and commuting costs," Transportation Research Part A: Policy and Practice, Elsevier, vol. 41(2), pages 142-160, February.
- Rainald Borck & Matthias Wrede, 2004.
"Political Economy of Commuting Subsidies,"
CESifo Working Paper Series
1339, CESifo Group Munich.
- Safirova, Elena, 2002. "Telecommuting, traffic congestion, and agglomeration: a general equilibrium model," Journal of Urban Economics, Elsevier, vol. 52(1), pages 26-52, July.
- Keeler, Theodore E & Small, Kenneth A, 1977. "Optimal Peak-Load Pricing, Investment, and Service Levels on Urban Expressways," Journal of Political Economy, University of Chicago Press, vol. 85(1), pages 1-25, February.
- Eva Gutiérrez-i-Puigarnau & Jos van Ommeren, 2009.
"Labour Supply and Commuting,"
SOEPpapers on Multidisciplinary Panel Data Research
222, DIW Berlin, The German Socio-Economic Panel (SOEP).
- McDonald, Ian M & Solow, Robert M, 1981. "Wage Bargaining and Employment," American Economic Review, American Economic Association, vol. 71(5), pages 896-908, December.
- Strand, J., 1995.
"Efficient Environmental Taxation Under Worker-Firm Bargaining,"
19/1995, Oslo University, Department of Economics.
- Jon Strand, 1999. "Efficient Environmental Taxation Under Worker-Firm Bargaining," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 13(2), pages 125-141, March.
- Bruno De Borger & Kurt Van Dender, 2002.
"Transport tax reform, commuting and endogenous values of time,"
Energy, Transport and Environment Working Papers Series
ete0207, Katholieke Universiteit Leuven, Centrum voor Economische Studiën, Energy, Transport and Environment.
- De Borger, Bruno & Van Dender, Kurt, 2003. "Transport tax reform, commuting, and endogenous values of time," Journal of Urban Economics, Elsevier, vol. 53(3), pages 510-530, May.
- DE BORGER, Bruno & VAN DENDER, Kurt, . "Transport tax reform, commuting and endogenous values of time," Working Papers 2003004, University of Antwerp, Faculty of Applied Economics.
- Parry, Ian W H & Bento, Antonio, 2001.
" Revenue Recycling and the Welfare Effects of Road Pricing,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 103(4), pages 645-71, December.
- Parry, Ian & Bento, Antonio, 1999. "Revenue Recycling and the Welfare Effects of Road Pricing," Discussion Papers dp-99-45, Resources For the Future.
- Parry, Ian W.H. & Bento, Antonio Miguel R., 1999. "Revenue recycling and the welfare effects of road pricing," Policy Research Working Paper Series 2253, The World Bank.
- Tony Venables, 2004.
"Evaluating urban transport improvements: cost benefit analysis in the presence of agglomeration and income taxation,"
LSE Research Online Documents on Economics
2205, London School of Economics and Political Science, LSE Library.
- Anthony J. Venables, 2007. "Evaluating Urban Transport Improvements: Cost-Benefit Analysis in the Presence of Agglomeration and Income Taxation," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 41(2), pages 173-188, May.
- Anthony J. Venables, 2004. "Evaluating Urban Transport Improvements: Cost Benefit Analysis in the Presence of Agglomeration and Income Taxation," CEP Discussion Papers dp0651, Centre for Economic Performance, LSE.
- Kurt Van Dender, 2003. "Transport Taxes with Multiple Trip Purposes," Scandinavian Journal of Economics, Wiley Blackwell, vol. 105(2), pages 295-310, 06.
- Mayeres, Inge & Proost, Stef, 2001.
"Marginal tax reform, externalities and income distribution,"
Journal of Public Economics,
Elsevier, vol. 79(2), pages 343-363, February.
- Inge Mayeres & Stef Proost, 1998. "Marginal Tax Reform, Externalities and Income Distribution," Center for Economic Studies - Discussion papers ces9832, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
- Bayindir-Upmann, Thorsten & Raith, Matthias G., 2003. "Should high-tax countries pursue revenue-neutral ecological tax reforms?," European Economic Review, Elsevier, vol. 47(1), pages 41-60, February.
- DE BORGER, Bruno, . "Commuting, congestion tolls and noncompetitive labour markets: Optimal congestion pricing in a wage bargaining model," Working Papers 2006014, University of Antwerp, Faculty of Applied Economics.
- Páez, Antonio & Whalen, Kate, 2010. "Enjoyment of commute: A comparison of different transportation modes," Transportation Research Part A: Policy and Practice, Elsevier, vol. 44(7), pages 537-549, August.
- Schneider, Kerstin, 1997. " Involuntary Unemployment and Environmental Policy: The Double Dividend Hypothesis," Scandinavian Journal of Economics, Wiley Blackwell, vol. 99(1), pages 45-49, March.
- Van Ommeren, Jos & Rietveld, Piet, 2005. "The commuting time paradox," Journal of Urban Economics, Elsevier, vol. 58(3), pages 437-454, November.
- Creedy, John & McDonald, Ian M, 1991. "Models of Trade Union Behaviour: A Synthesis," The Economic Record, The Economic Society of Australia, vol. 67(199), pages 346-59, December.
- Ory, David T. & Mokhtarian, Patricia L., 2005. "When is getting there half the fun? Modeling the liking for travel," Transportation Research Part A: Policy and Practice, Elsevier, vol. 39(2-3), pages 97-123.
- Gerard de Jong & Hugh Gunn, 2001. "Recent Evidence on Car Cost and Time Elasticities of Travel Demand in Europe," Journal of Transport Economics and Policy, London School of Economics and University of Bath, vol. 35(2), pages 137-160, May.
- Russo, Antonio, 2012. "Pricing of Transport Networks, Redistribution and Optimal Taxation," TSE Working Papers 12-353, Toulouse School of Economics (TSE).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.