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CEP discussion paper

Concentration Versus Re-Matching? Evidence About the Locational Effects of Commuting Costs


Using administrative employer-employee data from Germany, I exploit two reductions of tax breaks for commuting in 2003/4 and 2006/7 to estimate commuting costs’ effect on the decision to switch job and move house. Standard theory predicts that higher commuting costs should lead to increased concentration in urban centers. However, I find that re-matching of existing jobs and houses to reduce commuting distances is much more prevalent in the data. With these estimates I calculate the effect of a complete abolition of the tax breaks on overall travel distance, fuel usage, greenhouse gas emissions, the tax base, and the de-population of the countryside.


Michael J. Boehm

7 May 2013     Paper Number CEPDP1207

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This CEP discussion paper is published under the centre's Labour markets programme.