Labor Market Effects of Congestion Pricing in a Heterogeneous Population

• Do congestion pricing reduce labor supply? Since a congestion charge raises the monetary cost of car commuting, concerns have been raised that the toll may decrease labor supply at the extensive margin in a similar way as an income tax. The paper studies the effect of a congestion charge on welfare, equity and labor supply in a commuting population with heterogeneous value of time and endogenous labor supply. The congestion charge decreases labor supply among commuters who change from car to public transport, but increases labor supply among the remaining car commuters. When explicitly taking into account that commuters have different value of time, aggregate labor supply is found to increase even when the revenues are not recycled back to the commuters. This indicates that a congestion charge by itself does not reduce aggregate labor supply. The analysis hence stresses the importance of recognizing traveler heterogeneity when analyzing congestion pricing.

Ämnesord

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

TEKNIK OCH TEKNOLOGIER  -- Samhällsbyggnadsteknik -- Transportteknik och logistik (hsv//swe)

ENGINEERING AND TECHNOLOGY  -- Civil Engineering -- Transport Systems and Logistics (hsv//eng)

Nyckelord

congestion toll; tax distortions; welfare effects; equity; labor supply; revenue recycling

SRA - Transport

SRA - Transport

Publikations- och innehållstyp

vet (ämneskategori)

ovr (ämneskategori)