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Dr. Maria Börjesson - The Impact of Accessibility on Labor Earnings

Thursday 13 October 2016

Associate Professor, Director of the Centre for Transport Studies,
KTH Royal Institute of Technology

The Impact of Accessibility on Labor Earnings

Thursday 13th October 2016

We estimate to what extent decision makers can induce agglomeration by investing in transport improvements increasing the job accessibility, and how this in turn influences wage growth. We deal with endogeneity by modelling changes over 11 years using micro-level panel data and using the FE estimator, controlling for all time invariant unobserved variables. The endogeneity not controlled for by the FE estimator is dealt with by using an instrument that is also based on temporal changes. We control for both zone-specific and individual-specific fixed effects by separating workers who have changed zone of residence and those who have stayed. The accessibility is derived from a transport model, taking into account consumer behavior and preferences for all travel modes and travel time components.  The elasticity of accessibility defined from the worker’s place of residence is estimated at 0.007. The elasticity of wage earnings with respect to job accessibility at the work location is only significant for workers changing work location and for those estimated at 0.015