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Shirking, Commuting and Labor Market Outcomes

Stephen Ross () and Yves Zenou ()

No 2003-41, Working papers from University of Connecticut, Department of Economics

Abstract: Recent theoretical work has examined the spatial distribution of unemployment using the efficiency wage model as the mechanism by which unemployment arises in the urban economy. This paper extends the standard efficiency wage model in order to allow for behavioral substitution between leisure time at home and effort at work. In equilibrium, residing at a location with a long commute affects the time available for leisure at home and therefore affects the trade-off between effort at work and risk of unemployment. This model implies an empirical relationship between expected commutes and labor market outcomes, which is tested using the metropolitan sample of the American Housing Survey. No evidence is found to suggest a consistent impact of efficiency wages on the spatial pattern of unemployment or earnings.

Keywords: Efficiency wage; leisure; urban unemployment; American Housing Survey. (search for similar items in EconPapers)
JEL-codes: J41 R14 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo, nep-lab and nep-ure
Date: 2003-11
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