Regional Labor Markets: The Relationship Between Industry Level Employment and In-commuting in Pennsylvania Counties

Hoping to generate employment opportunities for residents, communities often offer location incentives to businesses. But many newly created jobs may go to commuters rather than local residents, resulting in higher incentive costs per local job than perhaps anticipated. In this paper we examine the allocation of employment across space, emphasizing the propensity of commuters to “capture” jobs. Central to our work is an industry-level model of incommuting, where commuters balance employment and wage opportunities with relative housing prices and travel costs. Using data from 65 Pennsylvania counties, our empirical results suggest that the proportion of jobs filled by in-commuters varies by industry, ranging from 0.036 (farming) to 0.498 (federal government). Thus communities courting employers should recognize that local benefits of employment growth might depend on the industry. Furthermore, when recruiting industries where there is a high propensity to commute, communities should pursue regional agreements when offering incentives so as to internalize some of the spillover effects.

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Journal Article
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Journal of Regional Analysis and Policy, 30, 2
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 Record created 2017-04-01, last modified 2018-11-28

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