Subject：Beyond Lost Earnings: Job Displacement and the Cost of Commuting

Speaker：Duan Yige, University of British Columbia (UBC)

Time：January 11, 2024 at 10:00

Venue：EMS 440

Abstract:This paper studies the scarring effect of job displacement on workers' commuting costs to subsequent jobs. Using matched German employee-employer data, geo-coordinates of workers' residences and workplaces, and a matched event study design, we estimate the response of workers' commuting distances to job displacement in mass layoffs. After displacement, workers take up jobs that require 21 percent longer commuting, and the effect persists in the subsequent 10 years. To quantify the monetary value of increased commuting, we develop an on-the-job search model and structurally estimate workers' willingness to pay to avoid commuting. The extra commuting cost amounts to one-fifth of the wage losses facing displaced workers, thereby exacerbating the total cost of job displacement.

Guest Bio: Duan Yige, PhD candidate in the School of Economics at the University of British Columbia. His research areas include labor economics, urban economics, and public economics, with a focus on labor mobility, the spatial relationships in labor markets, and industrial policy. His research findings have been published in Management Science.