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Will You Follow Your Job to the Suburbs? Commuting, Locational Amenities and Wages in a Large Metro Area

Author

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  • Gregory Verdugo

    (Université Paris-Saclay, UEVE - Université d'Évry-Val-d'Essonne, OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po)

  • Malak Kandoussi

    (UM6P - Université Mohammed VI Polytechnique = Mohammed VI Polytechnic University [Ben Guerir])

Abstract

We examine how relocations from the center to the suburbs of establishments employing mainly skilled workers affect the composition and wages of their employees. Using data from the Paris metro area, we find that these relocations increase average commuting time by 19%. In response, firms compensate highly paid workers with 10 to 20% of their hourly wage per additional hour of commuting. Lower-paid workers receive no compensation and are more likely to leave. Consistent with workers valuing locational amenities, we find little increase in separation and no wage adjustment for increased commuting time when establishments relocate to more attractive neighborhoods.

Suggested Citation

  • Gregory Verdugo & Malak Kandoussi, 2025. "Will You Follow Your Job to the Suburbs? Commuting, Locational Amenities and Wages in a Large Metro Area," Sciences Po Economics Publications (main) hal-05391709, HAL.
    • Handle: RePEc:hal:spmain:hal-05391709
    Note: View the original document on HAL open archive server: https://sciencespo.hal.science/hal-05391709v1
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    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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