Title
The structure of the labor market, telecommuting, and optimal peak period congestion tolls : a numerical optimization modeThe structure of the labor market, telecommuting, and optimal peak period congestion tolls : a numerical optimization mode
Author
Faculty/Department
Faculty of Applied Economics
Research group
Economics
Publication type
article
Publication
Amsterdam,
Subject
Economics
Source (journal)
Regional science & urban economics. - Amsterdam
Volume/pages
41(2011):5, p. 426-438
ISSN
0166-0462
ISI
000294398100002
Carrier
E
Target language
English (eng)
Full text (Publishers DOI)
Affiliation
University of Antwerp
Abstract
This paper extends a standard model of welfare optimal peak-period congestion tolls to take into account two characteristics of typical European labor markets, viz. wage bargaining and the increasing potential of telecommuting as an alternative to working on-the-job. Specifically, we consider the government's problem of determining optimal labor and peak-period transport taxes under two different labor market structures, viz., a competitive labor market and a wage bargaining setting. The models include commuting and non-commuting transports, and they allow for telecommuting. We implement the models numerically using Belgian data. Results include the following. First, if union preferences reflect the transport concerns of their members, we find that optimal congestion taxes under competitive labor market conditions exceed those under bargaining by 1017%. Second, the combination of substantially higher transport taxes and lower labor taxes compared to the reference situation jointly implies that the optimal tax structure strongly stimulates telecommuting for both labor market structures considered. Third, it is found that improving the efficiency of telecommuting results in a considerable reduction of optimal congestion tolls.
E-info
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