Title : Stuck in the middle? Occupation-specific commute-wage trade-off at the metropolitan level
Author(s) : Maxime Liegey, Nathalie Picard
Abstract : How do middle-skilled workers trade off wages against commuting time, as compared to high- and low-skilled ones? In this paper, we leverage a quasi-exhaustive panel of jobs in France, to explore how unobserved heterogeneity can help characterize workers’ trade-off at the metropolitan area level. We use estimated workerand employer fixed effects in order to construct two measures of how constrained workers are, depending on their broad occupational group. A first measure, the Commute-Wage Gradient (CWG), captures the trade-off that a marginal entrant into a metropolitan area would face, while a second, labelled Monopsony Power Measure (MPM), gauges the extent to which employers’ monopsony power influences workers’ outside options at alternative employers. We find that middle-skilled workers are stuck, in the sense that higher-wage middle-skilled earners have to commute more, than otherwise identical high- or low-skilled workers, while being at the same time more subject to monospony power. By contrast, high-skilled workers are less constrained according to both measures. Last, we document non-monotonicites in the case of low-skilled workers, which is hardly consistent with a job ladder model.
Key-words : commute-wage trade-off; job ladder model; two-way fixed effects; occupations
JEL Classification : C33; J31; J42; J62; R10
