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Do commuting subsidies increase commuting distances? Evidence from a Regression Kink Design

Jörg Paetzold

Regional Science and Urban Economics, 2019, vol. 75, issue C, 136-147

Abstract: I exploit a kink in the benefit scheme of a large commuter tax break to study the effect of subsidizing commuting costs on the commuting distance of employees. My results show a significant change in slope in the relationship between income and commuting distance exactly at the income level where the commuting subsidy becomes more generous. I test the robustness of this finding by using variation in the location of the benefit kink over time. My results indicate that commuting subsidies can indeed increase the length of the commute. This finding contributes to discussions about the efficacy of such subsidies, which often are justified on the grounds of making workers more mobile.

Keywords: Public policy; Commuting subsidy; Commuting behavior; Taxation; Administrative data (search for similar items in EconPapers)
JEL-codes: H21 H24 J22 J38 R23 R41 (search for similar items in EconPapers)
Date: 2019
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Handle: RePEc:eee:regeco:v:75:y:2019:i:c:p:136-147