Commuting, Wages and Bargaining Power
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.
|Date of creation:||Oct 2009|
|Date of revision:|
|Publication status:||published in: Annales d'Economie et de Statistiques, 2009, (95 - 96), 201 - 221|
|Contact details of provider:|| Postal: |
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
|Order Information:|| Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany|
References listed on IDEAS
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.:
- Gautier, Pieter A. & Zenou, Yves, 2008.
"Car Ownership and the Labor Market of Ethnic Minorities,"
IZA Discussion Papers
3814, Institute for the Study of Labor (IZA).
- 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.
- Gautier, Pieter A & Zenou, Yves, 2008. "Car Ownership and the Labour Market of Ethnic Minorities," CEPR Discussion Papers 7061, C.E.P.R. Discussion Papers.
- Pierre Cahuc & Fabien Postel-Vinay & Jean-Marc Robin, 2006.
"Wage bargaining with on-the-job search: theory and evidence,"
Sciences Po publications
info:hdl:2441/dc0ckec3fcb, Sciences Po.
- 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, 03.
- Cahuc, Pierre & Postel-Vinay, Fabien & Robin, Jean-Marc, 2003. "Wage Bargaining with On-The-Job Search: Theory and Evidence," CEPR Discussion Papers 4154, C.E.P.R. Discussion Papers.
- Pierre Cahuc & Fabien Postel-Vinay & Jean-Marc Robin, 2006. "Wage bargaining with on-the-job search: theory and evidence," Working Papers 150201, Institut National de la Recherche Agronomique, France.
- Pierre Cahuc & Fabien Postel-Vinay & Jean-Marc Robin, 2003. "Wage bargaining with on-the-job search : theory and evidence," Research Unit Working Papers 0212, Laboratoire d'Economie Appliquee, INRA.
- 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.
- Diamond, Peter A, 1982. "Wage Determination and Efficiency in Search Equilibrium," Review of Economic Studies, Wiley Blackwell, vol. 49(2), pages 217-27, April.
- Diamond, Peter A, 1981.
"Mobility Costs, Frictional Unemployment, and Efficiency,"
Journal of Political Economy,
University of Chicago Press, vol. 89(4), pages 798-812, August.
- P. Diamond, 1980. "Mobility Costs, Frictional Unemployment and Efficiency," Working papers 257, Massachusetts Institute of Technology (MIT), Department of Economics.
- 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.
- 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.
- Ommeren, Jos van & Berg, Gerard J. van den & Gorter, Cees, 1998. "Estimating the marginal willingness to pay for commuting," Serie Research Memoranda 0046, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
- 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.
- repec:dgr:uvatin:2008106 is not listed on IDEAS
- Damien Gaumont & Martin Schindler & Randall Wright, 2005.
"Alternative Theories of Wage Dispersion,"
PIER Working Paper Archive
05-017, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
- Hans Bloemen & Elena Stancanelli, 2001.
"Individual Wealth, Reservation Wages, and Transitions into Employment,"
Sciences Po publications
info:hdl:2441/9704, Sciences Po.
- Bloemen, Hans G & Stancanelli, Elena G F, 2001. "Individual Wealth, Reservation Wages, and Transitions into Employment," Journal of Labor Economics, University of Chicago Press, vol. 19(2), pages 400-439, April.
- Bloemen, H.G. & Stancanelli, E.G.F., 1997. "Individual Wealth, Reservation Wages and Transitions into Employment," Discussion Paper 1997-02, Tilburg University, Center for Economic Research.
- Lucas, Robert Jr. & Prescott, Edward C., 1974. "Equilibrium search and unemployment," Journal of Economic Theory, Elsevier, vol. 7(2), pages 188-209, February.
- Alan Manning, 2003.
"The Real Thin Theory: Monopsony in Modern Labour Markets,"
CEP Discussion Papers
dp0564, Centre for Economic Performance, LSE.
- Manning, Alan, 2003. "The real thin theory: monopsony in modern labour markets," Labour Economics, Elsevier, vol. 10(2), pages 105-131, April.
- Alan Manning, 2003. "The real thin theory: monopsony in modern labour markets," LSE Research Online Documents on Economics 20050, London School of Economics and Political Science, LSE Library.
- Wasmer, Etienne & Zenou, Yves, 1999. "Does Space Affect Search? A Theory of Local Unemployment," CEPR Discussion Papers 2157, C.E.P.R. Discussion Papers.
- repec:dgr:uvatin:20080106 is not listed on IDEAS
- 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 269-81, April.
- George J. Stigler, 1961. "The Economics of Information," Journal of Political Economy, University of Chicago Press, vol. 69, pages 213.
- David Roodman, 2009. "Estimating Fully Observed Recursive Mixed-Process Models with cmp," Working Papers 168, Center for Global Development.
When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp4510. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak)
If references are entirely missing, you can add them using this form.