EconPapers    
Economics at your fingertips  
 

Building Bridges and Widening Gaps: Wage Gains and Equity Concerns of Labor Market Expansions

Aline Butikofer, Katrine Løken () and Alexander Willén ()

No 14287, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We exploit the construction of the Oresund bridge, which connects a medium-sized city in Sweden to the capital of Denmark, to study the labor market effects of gaining access to a larger labor market. Using unique cross-country matched registry data that allow us to follow individuals across the border, we find that the bridge led to a substantial increase in cross-country commuting among Swedish residents. This effect is driven both by extensive and intensive margin employment responses, and translates into a 15% increase in the average wage of Swedish residents. However, the wage effects are unevenly distributed: the effect is largest for high-educated men and smallest for low-educated women. Thus, the wage gains come at the cost of increased income inequality and a widening of the gender wage gap, both within- and across-households. We show that these inequality effects are driven not only by differences in the propensity to commute, but also by educational specialization.

Keywords: Equity Concerns; Labor Market Expansions; wages (search for similar items in EconPapers)
JEL-codes: J3 J62 (search for similar items in EconPapers)
Date: 2020-01
New Economics Papers: this item is included in nep-eur and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=14287 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Building Bridges and Widening Gaps: Wage Gains and Equity Concerns of Labor Market Expansions (2020) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:14287

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... rs/dp.php?dpno=14287

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().

 
Page updated 2023-01-12
Handle: RePEc:cpr:ceprdp:14287