Will you follow your job to the suburbs?

Gregory Verdugo () and Malak Kandoussi ()
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Gregory Verdugo: CY - CY Cergy Paris Université, OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po
Malak Kandoussi: EPEE - Centre d'Etudes des Politiques Economiques - UEVE - Université d'Évry-Val-d'Essonne - Université Paris-Saclay

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Abstract: We examine how relocations from the center to the suburbs of establishments employing mainly skilled workers affect the composition and wages of their employees. Using data from the Paris metro area, we find that these relocations increase average commuting time by 19%. In response, firms compensate highly paid workers with 10 to 20% of their hourly wage per additional hour of commuting. Lower-paid workers receive no compensation and are more likely to leave. Consistent with workers valuing locational amenities, we find little increase in separation and no wage adjustment for increased commuting time when establishments relocate to more attractive neighborhoods.

Keywords: Firm's location; Commuting time; Labor supply (search for similar items in EconPapers)
Date: 2025-11
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Published in Journal of Urban Economics, 2025, 150, pp.103814. ⟨10.1016/j.jue.2025.103814⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05447239

DOI: 10.1016/j.jue.2025.103814

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