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Beyond lost earnings: The long-term impact of jobdisplacement on workers' commuting behavior

Yige Duan (), Oskar Jost and Ramona Jost

No 44, CLEF Working Paper Series from Canadian Labour Economics Forum (CLEF), University of Waterloo

Abstract: We study the long-term impact of job displacement on workers' commuting behavior. Our measures of commuting exploit geo-coordinates of workers' places of residence and places of work, from which we calculate the door-to-door commuting distance and commuting time. Using German employee-employer matched data and an event study design, we identify the causal effect of job loss on workers displaced during a mass layoff. Conditional on finding a new job, workers' commuting distance and commuting time rise sharply after displacement and gradually decline in subsequent years. The recovery is due to employer changes rather than migration, and a larger increase in commuting would mitigate the wage loss due to job displacement. To rationalize our findings, we build an on-the-job search model with heterogeneous firm productivity and commuting distances. Our model predicts a joint recovery of wages and commuting despite a static tradeoff between the two attributes.

Keywords: commuting; mobility; displacement; job search (search for similar items in EconPapers)
JEL-codes: J3 J6 R23 R41 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-eur, nep-geo, nep-lab and nep-ure
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Working Paper: Beyond Lost Earnings: The Long-Term Impact of Job Displacement on Workers’ Commuting Behavior (2022) Downloads
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