IDEAS home Printed from https://ideas.repec.org/p/cdl/ucsbec/qt1wf7x3rg.html
   My bibliography  Save this paper

Commuting, Wages and Bargaining Power

Author

Listed:
  • Rupert, Peter
  • Stancanelli, Elena G F
  • Wasmer, Etienne

Abstract

A search model of the labor market is augmented to include commuting time to work. The theory posits that wages are positively related to commute distance, by a factor itself depending negatively on the bargaining power of workers. Since not all combinations of distance and wages are accepted, there is non-random selection of accepted job offers. We build on these ingredients to explore in the data the relationship between wages and commute time. We find that neglecting to account for this selection will bias downward the wage impact of commuting, and marginally affect the coefficients on education, age and gender. The correlation between the residuals of the selectivity equation and the distance equation is -0.70, showing the large impact of commute time on job acceptance decisions. We also use the theory to calculate the bargaining power of workers which largely varies depending on demographic groups: it appears to be much larger for men than that for women and that the bargaining power of women with young children is essentially zero.

Suggested Citation

  • Rupert, Peter & Stancanelli, Elena G F & Wasmer, Etienne, 2009. "Commuting, Wages and Bargaining Power," University of California at Santa Barbara, Economics Working Paper Series qt1wf7x3rg, Department of Economics, UC Santa Barbara.
    • Handle: RePEc:cdl:ucsbec:qt1wf7x3rg
    as

    Download full text from publisher

    File URL: https://www.escholarship.org/uc/item/1wf7x3rg.pdf;origin=repeccitec
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. van den Berg, Gerard J & Gorter, Cees, 1997. "Job Search and Commuting Time," Journal of Business & Economic Statistics, American Statistical Association, vol. 15(2), pages 269-281, April.
    2. Gautier, Pieter A. & Zenou, Yves, 2010. "Car ownership and the labor market of ethnic minorities," Journal of Urban Economics, Elsevier, vol. 67(3), pages 392-403, May.
    3. Pierre Cahuc & Fabien Postel-Vinay & Jean-Marc Robin, 2006. "Wage Bargaining with On-the-Job Search: Theory and Evidence," Econometrica, Econometric Society, vol. 74(2), pages 323-364, March.
    4. Manning, Alan, 2003. "The real thin theory: monopsony in modern labour markets," Labour Economics, Elsevier, vol. 10(2), pages 105-131, April.
    5. Wasmer, Etienne & Zenou, Yves, 1999. "Does Space Affect Search? A Theory of Local Unemployment," CEPR Discussion Papers 2157, C.E.P.R. Discussion Papers.
    6. International Monetary Fund, 2006. "Equilibrium Wage Dispersion: An Example," IMF Working Papers 2006/019, International Monetary Fund.
    7. John M. Abowd & Francis Kramarz, 1992. "A Test of Negotiation and Incentive Compensation Models Using Longitudinal French Enterprise Data," NBER Working Papers 4044, National Bureau of Economic Research, Inc.
    8. Gaumont Damien & Schindler Martin & Wright Randall, 2006. "Equilibrium Wage Dispersion: An Example," The B.E. Journal of Macroeconomics, De Gruyter, vol. 6(2), pages 1-18, October.
    9. Jos Van Ommeren & Gerard J. Van Den Berg & Cees Gorter, 2000. "Estimating the Marginal Willingness to Pay for Commuting," Journal of Regional Science, Wiley Blackwell, vol. 40(3), pages 541-563, August.
    10. Shihe Fu & Stephen L. Ross, 2010. "Wage Premia in Employment Clusters: Agglomeration or Worker Heterogeneity?," Working Papers 10-04, Center for Economic Studies, U.S. Census Bureau.
    11. repec:spo:wpmain:info:hdl:2441/dc0ckec3fcb29ms9850c12h1p is not listed on IDEAS
    12. David Roodman, 2009. "Estimating Fully Observed Recursive Mixed-Process Models with cmp," Working Papers 168, Center for Global Development.
    13. Lucas, Robert Jr. & Prescott, Edward C., 1974. "Equilibrium search and unemployment," Journal of Economic Theory, Elsevier, vol. 7(2), pages 188-209, February.
    14. repec:hal:spmain:info:hdl:2441/dc0ckec3fcb29ms9850c12h1p is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Peter Ruppert & Elena Stancanelli & Etienne Wasmer, 2009. "Commuting, Wages and Bargaining Power," Annals of Economics and Statistics, GENES, issue 95-96, pages 201-220.
    2. Jean Flemming, 2018. "Costly Commuting and the Job Ladder," 2018 Meeting Papers 100, Society for Economic Dynamics.
    3. Peter Rupert & Elena Stancanelli & Etienne Wasmer, 2009. "Commuting, Wages and Bargaining Power," SciencePo Working papers hal-00972825, HAL.
    4. repec:spo:wpmain:info:hdl:2441/10031 is not listed on IDEAS
    5. repec:spo:wpecon:info:hdl:2441/10031 is not listed on IDEAS
    6. repec:hal:wpspec:info:hdl:2441/10031 is not listed on IDEAS
    7. repec:hal:spmain:info:hdl:2441/10031 is not listed on IDEAS
    8. Giménez-Nadal, José Ignacio & Velilla, Jorge & Ortega-Lapiedra, Raquel, 2024. "Differences in commuting between employee and self-employed workers: The case of Latin America," Journal of Transport Geography, Elsevier, vol. 114(C).
    9. Manning, Alan, 2011. "Imperfect Competition in the Labor Market," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 11, pages 973-1041, Elsevier.
    10. Van Ommeren, Jos & Fosgerau, Mogens, 2009. "Workers' marginal costs of commuting," Journal of Urban Economics, Elsevier, vol. 65(1), pages 38-47, January.
    11. Ignacio Gimenez-Nadal, J. & Molina, Jose Alberto & Velilla, Jorge, 2018. "The commuting behavior of workers in the United States: Differences between the employed and the self-employed," Journal of Transport Geography, Elsevier, vol. 66(C), pages 19-29.
    12. Thomas Le Barbanchon & Roland Rathelot & Alexandra Roulet, 2021. "Gender Differences in Job Search: Trading off Commute against Wage," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(1), pages 381-426.
    13. Dauth, Wolfgang & Haller, Peter, 2016. "The valuation of changes in commuting distances: an analysis using georeferenced data," IAB-Discussion Paper 201643, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    14. Dauth, Wolfgang & Haller, Peter, 2020. "Is there loss aversion in the trade-off between wages and commuting distances?," Regional Science and Urban Economics, Elsevier, vol. 83(C).
    15. van Ommeren, Jos N. & van der Straaten, J. Willemijn, 2008. "The effect of search imperfections on commuting behaviour: Evidence from employed and self-employed workers," Regional Science and Urban Economics, Elsevier, vol. 38(2), pages 127-147, March.
    16. Dauth, Wolfgang & Haller, Peter, 2019. "Loss aversion in the trade-off between wages and commuting distances," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203611, Verein für Socialpolitik / German Economic Association.
    17. Jennifer Roberts & Karl Taylor, 2017. "Intra-household commuting choices and local labour markets," Oxford Economic Papers, Oxford University Press, vol. 69(3), pages 734-757.
    18. Olof Åslund & John Östh & Yves Zenou, 2010. "How important is access to jobs? Old question--improved answer," Journal of Economic Geography, Oxford University Press, vol. 10(3), pages 389-422, May.
    19. Daniel Monte & Roberto Pinheiro, 2021. "Labor market competition over the business cycle," Economic Inquiry, Western Economic Association International, vol. 59(4), pages 1593-1615, October.
    20. Giménez-Nadal, José Ignacio & Velilla, Jorge & Ortega, Raquel, 2022. "Revisiting excess commuting and self-employment: The case of Latin America," GLO Discussion Paper Series 1179, Global Labor Organization (GLO).
    21. Moser, Christian, 2016. "How Could Wage Inequality Within and Across Enterprises be Reduced?," MPRA Paper 95381, University Library of Munich, Germany.
    22. Vincent Boitier, 2013. "Endogenous city size in urban search models: the case of high reallocation costs," ERSA conference papers ersa13p590, European Regional Science Association.
    23. Ismir Mulalic & Jos N. Van Ommeren & Ninette Pilegaard, 2014. "Wages and Commuting: Quasi‐natural Experiments' Evidence from Firms that Relocate," Economic Journal, Royal Economic Society, vol. 124(579), pages 1086-1105, September.
    24. Andreas Hornstein & Per Krusell & Giovanni L. Violante, 2011. "Frictional Wage Dispersion in Search Models: A Quantitative Assessment," American Economic Review, American Economic Association, vol. 101(7), pages 2873-2898, December.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cdl:ucsbec:qt1wf7x3rg. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lisa Schiff (email available below). General contact details of provider: https://edirc.repec.org/data/educsus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.