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. A one kilometre increase in commuting distance induces a wage increase of about 0.42%, suggesting an hourly commuting time compensation of 49% of the hourly net wage. Our findings are consistent with wage bargaining theory and due to the experimental setup we are able to exclude many competing explanations of the wage-distance relationship.
|Publication status||Published - 2010|
|Event||The 5th Kuhmo-Nectar Conference 2010 - University of Valencia, Valencia, Spain|
Duration: 5 Jul 2010 → 9 Jul 2010
Conference number: 5
|Conference||The 5th Kuhmo-Nectar Conference 2010|
|Location||University of Valencia|
|Period||05/07/2010 → 09/07/2010|