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.
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Bibliographic InfoArticle provided by Elsevier in its journal Regional Science and Urban Economics.
Volume (Year): 41 (2011)
Issue (Month): 5 (September)
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Web page: http://www.elsevier.com/locate/regec
Congestion taxes Competitive labor markets Wage bargaining Telecommuting;
Other versions of this item:
- De Borger B. & Wuyts B., 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.
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