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The impact of anti-congestion policies and the role of labor-supply margins

Georg Hirte () and Stefan Tscharaktschiew

No 04/18, CEPIE Working Papers from Technische Universität Dresden, Center of Public and International Economics (CEPIE)

Abstract: Transportation economists apply different labor supply models when studying anti-congestion policy: (i) endogenous working hours; (ii) endogenous workdays but given daily working hours; (iii) labor supply as a residual. We study whether the outcome of anti-congestion policies that change the relative cost of labor supply margins, and, thus, may affect decisions on working hours and working days, is robust against the model applied. In particular, we focus on welfare implications in the presence of other taxes when there is a congestion externality. We find surprisingly strong differences in quantity and sign. Further, we develop a clear recommendation for future research on issues that include decisions on commuting trips. Researchers shall apply both a model of endogenous working hours that provides an upper limit and a model of endogenous workdays that provide a lower limit of results for welfare changes, optimal policies and two optimal tax components (Pigouvian and Ramsey terms).

Keywords: Public Economics; Tax Design; Time Allocation; Labor Supply; Pigouvian Tax; Urban Economics; CGE; Spatial Modeling; Transportation; Transportation Economics; Transport Policy; Congestion (search for similar items in EconPapers)
JEL-codes: H2 H3 J2 R1 R4 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lma, nep-pbe, nep-tre and nep-ure
Date: 2018
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