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Economy-Wide Spillovers from Booms: Long-Distance Commuting and the Spread of Wage Effects

Author

Listed:
  • David A. Green
  • René Morissette
  • Ben M. Sand
  • Iain Snoddy

Abstract

Since 2000, US real average wages stagnated or declined while Canadian wages increased. We investigate the role of the Canadian resource boom in explaining this difference. We focus on wage spillovers to nonresource workers through a bargaining channel. We find that long-distance commuting to resource regions had substantial spillover effects on noncommuters in sending regions. Through spillovers, we account for 49% of the increase in the real mean wage in Canada between 2000 and 2012. We also find long-distance commuting effects in the United States. We conclude that long-distance commuting integrates regions, spreading benefits and costs of booms across the economy.

Suggested Citation

  • David A. Green & René Morissette & Ben M. Sand & Iain Snoddy, 2019. "Economy-Wide Spillovers from Booms: Long-Distance Commuting and the Spread of Wage Effects," Journal of Labor Economics, University of Chicago Press, vol. 37(S2), pages 643-687.
    • Handle: RePEc:ucp:jlabec:doi:10.1086/703362
    DOI: 10.1086/703362
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    Cited by:

    1. Joao Galindo da Fonseca, 2022. "Unemployment, Entrepreneurship and Firm Outcomes," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 45, pages 322-338, July.
    2. Alfaro-Urena, Alonso & Manelici, Isabela & Vasquez, Jose P, 2019. "The Effects of Multinationals on Workers: Evidence from Costa Rica," Institute for Research on Labor and Employment, Working Paper Series qt51r419w9, Institute of Industrial Relations, UC Berkeley.
    3. Simona E. Cociuba & James C. MacGee, 2018. "Demographics and Sectoral Reallocations: A Search Theory with Immobile Workers," University of Western Ontario, Departmental Research Report Series 20182, University of Western Ontario, Department of Economics.
    4. Jośé Ignacio Giménez-Nadal & José Alberto Molina & Jorge Velilla, 2025. "Commuting, Wages, and Household Decisions," Boston College Working Papers in Economics 1087, Boston College Department of Economics.
    5. Pierre Brochu & David Green & Thomas Lemieux & James Townsend, 2023. "The minimum wages, turnover, and the shape of the wage distribution," IFS Working Papers W23/32, Institute for Fiscal Studies.
    6. Mike Zabek, 2024. "Local Ties in Spatial Equilibrium," American Economic Journal: Macroeconomics, American Economic Association, vol. 16(2), pages 287-317, April.
    7. Winters, John V. & Cai, Zhengyu & Maguire, Karen & Sengupta, Shruti, 2019. "Do Workers Benefit from Resource Booms in Their Home State? Evidence from the Fracking Era," GLO Discussion Paper Series 400, Global Labor Organization (GLO).
    8. Jacob Greenspon & Anna Stansbury & Lawrence H. Summers, 2021. "Productivity and Pay in the United States and Canada," International Productivity Monitor, Centre for the Study of Living Standards, vol. 41, pages 3-30, Fall.
    9. Amior, Michael & Manning, Alan, 2019. "Commuting, migration and local joblessness," LSE Research Online Documents on Economics 102745, London School of Economics and Political Science, LSE Library.
    10. João Galindo da Fonseca & Charles Berubé, 2023. "Spouses, Children, And Entrepreneurship," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 64(3), pages 1165-1199, August.
    11. Alonso Alfaro Urena & Isabela Manelici & Jose P. Vasquez, 2021. "The Effects of Multinationals on Workers: Evidence from Costa Rican Microdata," Working Papers 285, Princeton University, Department of Economics, Center for Economic Policy Studies..
    12. Badura, Ondřej & Melecký, Aleš & Melecký, Martin, 2023. "Liberalizing passenger rail: The effect of competition on local unemployment," Economics of Transportation, Elsevier, vol. 36(C).
    13. Hanqing Qiu, 2023. "Interjurisdictional employment in Canada, 2002 to 2019," Economic and Social Reports 202300300004e, Statistics Canada, Analytical Studies and Modelling Branch.
    14. Christian Dustmann & Hyejin Ku & Tetyana Surovtseva, 2024. "Real Exchange Rates and the Earnings of Immigrants," The Economic Journal, Royal Economic Society, vol. 134(657), pages 271-294.
    15. Stephan Brunow & Ramona Jost, 2023. "Being a long distance out-commuter or home employee in a rather peripheral region evidence of a German federal state," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 43(2), pages 317-342, August.
    16. Green, David & Kesselman, Jonathan Rhys & Tedds, Lindsay M., 2021. "Covering All the Basics: Reforms for a More Just Society," MPRA Paper 105902, University Library of Munich, Germany.
    17. Gimenez-Nadal, José Ignacio & Molina, José Alberto & Velilla, Jorge, 2024. "Commuting, Wages, and Household Behavior," IZA Discussion Papers 17128, IZA Network @ LISER.
    18. Gittings, R. Kaj & Roach, Travis, 2020. "Who Benefits from a Resource Boom? Evidence from the Marcellus and Utica Shale Plays," Energy Economics, Elsevier, vol. 87(C).
    19. Unel, Bulent & Upton, Gregory B., 2023. "Oil & gas induced economic fluctuations and self-employment," Labour Economics, Elsevier, vol. 82(C).
    20. Onur Sapci, 2022. "The Impact of Shale Energy on Population Dynamics, Labor Migration, and Employment," Energies, MDPI, vol. 15(22), pages 1-17, November.

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    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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