Residential Location, Job Location, and Wages: Theory and Empirics
AbstractI develop a stylized partial on-the-job equilibrium search model which incorporate a spatial dimension. Workers reside on a circle and can move at a cost. Each point on the circle has a wage distribution. Implications about wages and job mobility are drawn from the model and tested on Danish matched employer-employee data. The model predictions hold true. I find that workers working farther away from their residence earn higher wages. When a worker is making a job-to-job transition where he changes workplace location he experiences a higher wage change than a worker making a job-to-job transition without changing workplace location. However, workers making a job-to-job transition which makes the workplace location closer to the residence experiences a wage drop. Furthermore, low wage workers and workers with high transportation costs are more likely to make job-to-job transitions, but also residential moves.
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Bibliographic InfoPaper provided by School of Economics and Management, University of Aarhus in its series Economics Working Papers with number 2010-14.
Date of creation: 27 Aug 2010
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Web page: http://www.econ.au.dk/afn/
ob mobility; residential mobility; wage dynamics; search;
Other versions of this item:
- Rune Vejlin, 2013. "Residential Location, Job Location, and Wages: Theory and Empirics," LABOUR, CEIS, vol. 27(2), pages 115-139, 06.
- J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
- J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
- R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-08-28 (All new papers)
- NEP-GEO-2010-08-28 (Economic Geography)
- NEP-LAB-2010-08-28 (Labour Economics)
- NEP-URE-2010-08-28 (Urban & Real Estate Economics)
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.:
- Matthew S. Dey & Christopher J. Flinn, 2005. "An Equilibrium Model of Health Insurance Provision and Wage Determination," Econometrica, Econometric Society, vol. 73(2), pages 571-627, 03.
- repec:bla:restud:v:77:y:2010:i:1:p:245-272 is not listed on IDEAS
- Ã‰va NagypÃ¡l, 2006. "On the extent of job-to-job transitions," 2006 Meeting Papers 10, Society for Economic Dynamics.
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