How Does Commute Time Affect Labor Supply in Urban China? Implications for Active Commuting

This paper identifies the causal effect of commute time on labor supply in urban China and provides implications for the development of active commuting. Labor supply is measured by daily workhours, workdays per week and weekly workhours, and city average commute time is adopted as an instrumental variable to correct the endogenous problem of individual commute time. We find that in urban China, commute time does not have effect on daily labor supply but has negative effects on workdays per week and weekly labor supply. These results are different from those found in Germany and Spain, and are potentially related to the intense competition among workers in the labor market of China. Moreover, the effect of commute time on workdays per week is stronger for job changed workers. In addition, the effects of commute time on labor supply are not different between males and females. Finally, policy implications for active commuting are discussed.