Wages and Commuting: Quasi-Natural Experiments' Evidence from Firms that relocate
AbstractWe examine the causal effect of commuting distance on workers' wages in a quasi-natural experiments setting using information on all workers in Denmark. We account for endogeneity of distance by using changes in distance that are due to firms' relocations. For the range of commuting distances where income tax reductions associated with commuting do not apply, one kilometre increase in commuting distance induces a wage increase of about 0.42%, suggesting an hourly compensation of about half of the hourly net wage. Our findings are consistent with wage bargaining theory and suggest a bargaining power parameter of about 0.50. Due to the experimental setup we are able to exclude many competing explanations of the wage-distance relationship.
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Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 10-093/3.
Date of creation: 10 Sep 2010
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Bargaining theory; Wages; Commuting;
Find related papers by JEL classification:
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
- R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-26 (All new papers)
- NEP-LAB-2011-02-26 (Labour Economics)
- NEP-URE-2011-02-26 (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.:
- Gutiérrez-i-Puigarnau, Eva & van Ommeren, Jos N., 2010.
"Labour supply and commuting,"
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- 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).
- Gutiérrez-i-Puigarnau, Eva & van Ommeren, Jos, 2010. "Labour Supply and Commuting," IZA Discussion Papers 4798, Institute for the Study of Labor (IZA).
- Van Ommeren, Jos & Rietveld, Piet, 2005. "The commuting time paradox," Journal of Urban Economics, Elsevier, vol. 58(3), pages 437-454, November.
- Martin Carree & Kristin Kronenberg, 2012.
"Locational choices and the costs of distance: empirical evidence for Dutch graduates,"
ERSA conference papers
ersa12p243, European Regional Science Association.
- Carree, Martin & Kronenberg, Kristin, 2012. "Locational choices and the costs of distance: empirical evidence for Dutch graduates," MPRA Paper 36221, University Library of Munich, Germany.
- Rosa Sanchis-Guarner, 2012. "Driving Up Wages: The Effects of Road Construction in Great Britain," SERC Discussion Papers 0120, Spatial Economics Research Centre, LSE.
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