Commuting and Reimbursement of Residential Relocation Costs
نویسندگان
چکیده
We develop an equilibrium job search model in which employees incur commuting costs, and residential relocation is costly. We demonstrate that firms partially compensate workers for the incurred relocation costs to avoid paying compensation for commuting costs when house prices do not fully compensate the commuting costs. Taxing reimbursement of relocation costs at a higher rate than reimbursement of commuting costs raises the length of the average journey to work and this tax structure should therefore be avoided if one of the governments’ policy objectives is to reduce the (external) costs of commuting. Date of receipt of final manuscript: April 2006 51 Journal of Transport Economics and Policy, Volume 41, Part 1, January 2007, pp. 51–73
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