Wages and accessibility – Evidence from Denmark

We estimate the elasticity of wages in Denmark with respect to the accessibility to jobs. This elasticity is used as an estimate for the productivity effects of transport infrastructure changes and is to be applied in calculations of the wider economic benefits of transport in policy appraisals in Denmark. The accessibility is a measure of economic density and is calculated as a weighted number of accessible jobs, where the weights are determined by a decreasing function of the generalised travel cost. The decay parameter determining the distance weighting is estimated from the data. We use a combination of different approaches, to control for selection bias and test the robustness of the results. The estimates are robust to the different estimation strategies. Over all, the elasticity varies in the range 0.008–0.037, and the estimates from our preferred models vary in the range 0.025–0.029.