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Shirking, Commuting and Labor Market Outcomes

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Author Info
Steven Ross (University of Connecticut)
Yves Zenou (IUI, University of Southampton and CEPR)

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Abstract

Recent theoretical work has examined the spatial distribution of unemployment using the efficiency wage model as the mechanism by which unemployment arises in the urban economy. This paper extends the standard efficiency wage model in order to allow for behavioral substitution between leisure time at home and effort at work. In equilibrium, residing at a location with a long commute affects the time available for leisure at home and therefore affects the trade-off between effort at work and risk of unemployment. This model implies an empirical relationship between expected commutes and labor market outcomes, which is tested using the metropolitan sample of the American Housing Survey. No evidence is found to suggest a consistent impact of efficiency wages on the spatial pattern of unemployment or earnings.

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File URL: http://www.econ.uconn.edu/working/2003-41.pdf
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Publisher Info
Paper provided by University of Connecticut, Department of Economics in its series Working papers with number 2003-41.

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Length: 41 pages
Date of creation: Nov 2003
Date of revision:
Handle: RePEc:uct:uconnp:2003-41

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Related research
Keywords: Efficiency wage; leisure; urban unemployment; American Housing Survey.;

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Find related papers by JEL classification:
J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
R14 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Land Use Patterns

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Cited by:
(explanations, 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.)

  1. Ross, Stephen L. & Zenou, Yves, 2007. "Are Shirking and Leisure Substitutable? An Empirical Test of Efficiency Wages based on Urban Economic Theory," CEPR Discussion Papers 6128, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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