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Recruitment in a Monopsonistic Labour Market: Will Travel Costs be reimbursed?

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  • Jan Rouwendal

    ()
    (Vrije Universiteit Amsterdam)

  • Jos van Ommeren

    ()
    (Vrije Universiteit Amsterdam)

Abstract

Reimbursement of commuting costs by employers has attracted little attention from economists. We develop a theoretical model of a monopsonistic employer who determines an optimal recruitment policy in a spatial labour market with search frictions and show that partial reimbursement of commuting cost will in general be an element of the recruitment policy. The empirical evidence we offer is consistent with the interpretation of reimbursement as the result of monopsonistic behaviour. The alternative explanation that stresses the role of tax incentives is unlikely to provide a full explanation of the commuting costs reimbursement.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 07-044/3.

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Date of creation: 11 Jun 2007
Date of revision: 03 Sep 2008
Handle: RePEc:dgr:uvatin:20070044

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Related research

Keywords: monopsonistic labour markets; commuting; spatial labour market analysis;

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References

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  13. Van Ommeren, Jos & Rietveld, Piet, 2005. "The commuting time paradox," Journal of Urban Economics, Elsevier, vol. 58(3), pages 437-454, November.
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Cited by:
  1. Zenou, Yves, 2009. "Urban search models under high-relocation costs. Theory and application to spatial mismatch," Labour Economics, Elsevier, vol. 16(5), pages 534-546, October.
  2. Giovanni Russo & Federico Tedeschi & Aura Reggiani & Peter Nijkamp, 2011. "Commuter Effects on Local Labour Markets: A German Modelling Study," Tinbergen Institute Discussion Papers 11-114/3, Tinbergen Institute.
  3. Eva Gutiļæ½rrez-i-Puigarnau & Jos van Ommeren, 2007. "Welfare Effects of Distortionary Company Car Taxation," Tinbergen Institute Discussion Papers 07-060/3, Tinbergen Institute, revised 20 Mar 2009.

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