Beyond lost earnings: Job displacement and the cost of commuting

Abstract

"We examine the impact of involuntary job displacement on workers ’ commuting behavior and its implications for the overall welfare cost of job loss. Using geo-referenced employee-employer data from Germany (2000–2017), we track workers’ door-to-door commuting and relocation patterns between home and work. After displacement, workers commute 23.1% (3.38 kilometers) farther to new jobs, and the effect diminishes over time due to job changes rather than home relocation. The simultaneous wage and commuting effects suggest that wage differentials across jobs fail to compensate for commuting costs. An on-the-job search model with heterogeneous firm productivity and commuting distance rationalizes the findings, and structural estimates reveal that an average German worker ’s commuting costs equal 20.2 euros per day. Hence, longer commutes exacerbate the total cost of job displacement by one-fifth of the wage losses." (Author's abstract, IAB-Doku, © 2026 Elsevier B.V. All rights are reserved, including those for text and data mining, AI training, and similar technologies.) ((en))

Cite article

Duan, Y., Jost, O., Jost, R. & Seibert, H. (2026): Beyond lost earnings: Job displacement and the cost of commuting. In: Journal of Public Economics, Vol. 255. DOI:10.1016/j.jpubeco.2026.105579