How do firms redline workers?

Abstract

This Discussion Paper is issued within the framework of IZA's research area The Future of Labor. Any opinions expressed here are those of the author(s) and not those of the institute. Research disseminated by IZA may include views on policy, but the institute itself takes no institutional policy positions.The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent, nonprofit limited liability company (Gesellschaft mit beschränkter Haftung) supported by the Deutsche Post AG. The center is associated with the University of Bonn and offers a stimulating research environment through its research networks, research support, and visitors and doctoral programs. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. The current research program deals with (1) mobility and flexibility of labor, (2) internationalization of labor markets, (3) welfare state and labor market, (4) labor markets in transition countries, (5) the future of labor, (6) evaluation of labor market policies and projects and (7) general labor economics.IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available on the IZA website (www.iza.org) or directly from the author. In a city where individuals endogenously choose their residential location, firms determine their spatial efficiency wage and a geographical red line beyond which they do not recruit workers. This is because workers experiencing longer commuting trips provide lower effort levels than those residing closer to jobs. By solving simultaneously for the land and labor market equilibrium, we show that there exists a unique market equilibrium that determines the location of all individuals in the city, the land rent, the efficiency wage, the recruitment area and the unemployment level in the economy. This model is able to provide a new mechanism for the spatial mismatch hypothesis by taking the firm's viewpoint. Distance to jobs is harmful not because workers have low information about jobs (search) or because commuting costs are too high but because firms do not hire remote workers. JEL Classification:J41, R14

Commuting and Sickness Absence

“…First, we demonstrate that sickness absence due to commuting is an important characteristic of the (German) labour market, which is in line with a range of theoretical models (Zenou, 2002). Second, the present study suggests that commuting may have far-reaching consequences for both employees and the financial performance of employers.…”

“…If commuting is negatively related to health, employees who commute are more likely to be absent from work (Zenou, 2002). In addition, the gain from absence in terms of hours which can be used for other purposes than work, such as recuperation, is likely to be higher for individuals who commute.…”

Sustainable city – flexible or durable? Socio-economics aspects of urban patterns

“…Long trips to location of workplaces can even exclude whole social groups from the labour market, e.g. women living in the suburbs, when the only car left in family is claimed by their husbands or partners (Hirt, 2008) or people too tired after the long commute to work effectively (Zenou, 2002).…”

Mobilidade, Acessibilidade E Produtividade: Nota Sobre a Valoração Econômica Do Tempo De Viagem Na Região Metropolitana De São Paulo

“…O tempo de deslocamento ao trabalho e o índice de acessibilidade da região de moradia do trabalhador fornecem, para a fase de calibragem, os soft links com o modelo de demanda de viagens. Espera-se que deslocamentos mais longos diminuam a produtividade dos agentes, pois induzem o trabalhador a chegar mais tarde ao trabalho ou a sair mais cedo, além de aumentar o número de faltas (Van Ommeren e Gutiérrez-i--Puigarnau, 2011); além disso, os trabalhadores que realizam deslocamentos mais curtos apresentam maiores níveis de esforço no trabalho (Zenou, 2002). As economias de aglomeração (captadas pelo índice de acessibilidade) também influenciam positivamente o ganho dos indivíduos, já que os trabalhadores tendem a ser mais bem pagos em mercados maiores e mais densos (Melo e Graham, 2009) 8 .…”