Residential Location, Job Location, and Wages: Theory and Empirics
I develop a stylized partial on-the-job equilibrium search model which incorporate a spatial dimension. Workers reside on a circle and can move at a cost. Each point on the circle has a wage distribution. Implications about wages and job mobility are drawn from the model and tested on Danish matched employer-employee data. The model predictions hold true. I find that workers working farther away from their residence earn higher wages. When a worker is making a job-to-job transition where he changes workplace location he experiences a higher wage change than a worker making a job-to-job transition without changing workplace location. However, workers making a job-to-job transition which makes the workplace location closer to the residence experiences a wage drop. Furthermore, low wage workers and workers with high transportation costs are more likely to make job-to-job transitions, but also residential moves.
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- Dey, M. S. & Flinn, C. J., 2000.
"An Equilibrium Model of Health Insurance Provision and Wage Determination,"
00-18, C.V. Starr Center for Applied Economics, New York University.
- Matthew S. Dey & Christopher J. Flinn, 2005. "An Equilibrium Model of Health Insurance Provision and Wage Determination," Econometrica, Econometric Society, vol. 73(2), pages 571-627, 03.
- Brueckner, Jan & Zenou, Yves, 2000.
"Space And Unemployment: The Labour-Market Effects Of Spatial Mismatch,"
CEPR Discussion Papers
2397, C.E.P.R. Discussion Papers.
- Jan K. Brueckner & Yves Zenou, 2003. "Space and Unemployment: The Labor-Market Effects of Spatial Mismatch," Journal of Labor Economics, University of Chicago Press, vol. 21(1), pages 242-262, January.
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