WAGES AND COMMUTING: QUASI-NATURAL EXPERIMENTS’ EVIDENCE FROM FIRMS THAT RELOCATE

Ismir Mulalic, Jos N. Van Ommeren, Ninette Pilegaard

    Research output: Contribution to journalJournal articleResearchpeer-review

    Abstract

    We examine individual-level compensating differentials for commuting distance in a quasi-natural experiment setting by examining how wages respond to changes in commuting distance induced by firm relocations. This set-up enables us to test for the relevance of job search frictions within labour market models. Due to the quasi-experimental set-up, we are able to avoid a range of endogeneity issues. We demonstrate that a 1 km increase in commuting distance induces an almost negligible wage increase in the year after the relocation but a more substantial wage increase of about 0.15% three years later.
    Original languageEnglish
    JournalEconomic Journal
    Volume124
    Issue number579
    Pages (from-to)1086–1105
    Number of pages25
    ISSN0013-0133
    DOIs
    Publication statusPublished - Sep 2014

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