Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/86754
Authors: 
Mulalic, Ismir
van Ommeren, Jos N.
Pilegaard, Ninette
Year of Publication: 
2010
Series/Report no.: 
Tinbergen Institute Discussion Paper 10-093/3
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.
Subjects: 
Bargaining theory
Wages
Commuting
JEL: 
J22
R41
Document Type: 
Working Paper

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