Commute Costs and Labor Supply: Evidence from a Satellite Campus

Shihe Fu (fushihe@whu.edu.cn) and V. Viard

MPRA Paper from University Library of Munich, Germany

Abstract: Whether, and how much, increased commute costs decrease labor supply is important for transport policy, city growth, and business strategies. Yet empirical estimates are limited and biased downward due to endogenous choices of residences, workplaces, commute modes, and wages. We use the transition of undergraduate teaching from a Chinese university’s urban to suburban campus and ten years of complete course schedule data to test how teachers’ labor supply responds to a longer commute. Exogeneity is ensured because few faculty change residences, nearly all faculty ride a free shuttle bus, and we control for wage changes. Employing a regression discontinuity design, the 1.0 to 1.5-hour (40-kilometer) increase in round-trip commute time reduces annual undergraduate teaching by 56 hours or 23%. Consistent with higher per-day commute costs annual teaching days decrease by 27 while daily teaching hours increase by 0.49. Difference-in-difference estimates using faculty-specific changes in commute time corroborate these results ruling out aggregate confounders. Faculty substitute toward graduate teaching but decrease research output. The university accommodated the reduced teaching time primarily by increasing class sizes implying that education quality declined.

Keywords: commuting; commute costs; labor supply; satellite campus (search for similar items in EconPapers)
JEL-codes: I23 I25 J22 R23 R41 (search for similar items in EconPapers)
Date: 2014-02-17
New Economics Papers: this item is included in nep-lab, nep-lma, nep-tre and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://mpra.ub.uni-muenchen.de/53740/1/MPRA_paper_53740.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/55608/1/MPRA_paper_53740.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/55608/8/MPRA_paper_55608.pdf revised version (application/pdf)

Related works:
Journal Article: Commute costs and labor supply: evidence from a satellite campus (2019)
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