Abstract
We examine the causal effect of commuting distance on workers' wages in a quasi-natural experiments setting using information on all workers in Denmark. We account for endogeneity of distance by using changes in distance that are due to firms’ relocations. For the range of
commuting distances where income tax reductions associated with commuting do not apply, one kilometre increase in commuting distance induces a wage increase of about 0.42%, suggesting an hourly compensation of about half of the hourly net wage. Our findings are consistent with wage
bargaining theory and suggest a bargaining power parameter of about 0.50. Due to the experimental setup we are able to exclude many competing explanations of the wage-distance
relationship.
| Original language | English |
|---|---|
| Title of host publication | NECTAR conference 'Smart Networks - Smooth Transport - Smiling People' |
| Publication date | 2011 |
| Publication status | Published - 2011 |
| Event | NECTAR conference 'Smart Networks - Smooth Transport - Smiling People' - University of Antwerp, Antwerp, Netherlands Duration: 18 May 2011 → 20 May 2011 |
Conference
| Conference | NECTAR conference 'Smart Networks - Smooth Transport - Smiling People' |
|---|---|
| Location | University of Antwerp |
| Country/Territory | Netherlands |
| City | Antwerp |
| Period | 18/05/2011 → 20/05/2011 |