Is Commuting Paying-off?


Event details

Date & time

Friday 14 May 2010


Seminar Room 1, Stanner Building (37), Lennox Crossing, ANU


Raden M Purnagunawan, PhD Candidate, ACDE


Convenor: Prema-chandra Athukorala
61258259 / 61252188
Discussant: Daniel Suryadarma; Panel Members: Assoc Prof Chris Manning, Prof Hal Hill and Dr Elliott Fan. – Abstract: This paper I investigated the economic returns to commuting among men in the island of Java in Indonesia using data from Indonesian Labor force survey 2007.
Controlling for personal characteristics, job relative characteristics, and different regional dummies, as well as taking into account the endogeneity problem in commuting decision by using difference in minimum wage as instrumental variables, I assess the impact of commuting on income separately by job status and location. The results reveal the existence of positive returns to commuting, with commuting men enjoying significantly higher income than similar non-commuter in the district of origin. On the other hand, we did not observed the positive wage premium if we compared the income of commuter with similar non-commuter in the district of destination. These results demonstrate that what might matter most to the commuter is to have higher income than if he had to work in their district of residence. The gain in the form of employability might also overweight the lower income they received compared to similar non-commuter in the district of destination.

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