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

Speaker: Yige Duan, Shanghai Jiao Tong University

Time: 2025/04/21 13:30-15:00

Venue: 106 Zhonghui Building

Abstract

We study the impact of job displacement on an important non-wage attribute of subsequent jobs: the commuting cost between home and work. Using geo-referenced employee-employer data in Germany, we show that displaced workers take up new jobs that require longer commuting by 23.1 percent (3.38 kilometers). The effect declines over time as workers change to jobs closer to their homes. Estimating an on-the-job search model with heterogeneous firms and commuting distances, we find a German worker incurs commuting costs of 20.2 euros per day. Thus, longer commuting exacerbates the total cost of job displacement by one-fifth of the wage losses.