Long-distance commuting and the effect of differentiated salary expectations in the commuters’ place of living on the wage obtained in the place of working

Peer Reviewed
13 March 2020

Manuel Pérez-Trujillo, Mauricio Oyarzo Aguilar, Dusan Paredes Araya

Despite the efficiency produced by long-distance commuting (LDC) as an adjustment mechanism between local labor markets, the impact that it has on the equilibrium of labor markets has not been studied in depth. This paper uses the case of Chile, since in the last two decades the LDC has increased its importance as a strategy of labor mobility for workers in this country. We demonstrate, both theoretically and empirically, that LDC generates wage differences in the labor markets that receive commuters, as a function of the market equilibrium of these workers’ place of origin. These differences are not only related to labor productivity and/or employment, but also to the wage expectations of commuters in their place of origin.

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Publication | 20 January 2021