Recruitment in a Monopsonistic Labour Market: Will Travel Costs be reimbursed?
AbstractReimbursement 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 InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 07-044/3.
Date of creation: 11 Jun 2007
Date of revision: 03 Sep 2008
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monopsonistic labour markets; commuting; spatial labour market analysis;
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- J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
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