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Shirking, Commuting and Labor Market Outcomes

  • Steven Ross

    (University of Connecticut)

  • Yves Zenou

    (IUI, University of Southampton and CEPR)

Recent theoretical work has examined the spatial distribution of unemployment using the efficiency wage model as the mechanism by which unemployment arises in the urban economy. This paper extends the standard efficiency wage model in order to allow for behavioral substitution between leisure time at home and effort at work. In equilibrium, residing at a location with a long commute affects the time available for leisure at home and therefore affects the trade-off between effort at work and risk of unemployment. This model implies an empirical relationship between expected commutes and labor market outcomes, which is tested using the metropolitan sample of the American Housing Survey. No evidence is found to suggest a consistent impact of efficiency wages on the spatial pattern of unemployment or earnings.

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Paper provided by University of Connecticut, Department of Economics in its series Working papers with number 2003-41.

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Length: 41 pages
Date of creation: Nov 2003
Date of revision:
Handle: RePEc:uct:uconnp:2003-41
Contact details of provider: Postal: University of Connecticut 365 Fairfield Way, Unit 1063 Storrs, CT 06269-1063
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Web page: http://www.econ.uconn.edu/

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