“The growth of public transport networks in the late-nineteenth and early-twentieth centuries had profound effects on labor markets. In 1890, a sizeable majority of working-class Londoners worked within a short walk of their residence, by 1930 over 70 percent commuted
at least one kilometer. The ability to commute allowed workers to search for jobs over a
wider geographic area and a larger number of potential employers. This, in turn, potentially
increased workers’ bargaining power and improved employer-employee matching. This paper
examines the returns to commuting and of access to public transport using individual-level
data from the New Survey of London Life and Labour, a household survey comprised of about
two percent of London’s working-class households, circa 1930. It is shown that the wage
returns to commuting were on the order of 1.5-3.5 percent per crow-flies kilometer travelled.
These returns accounted for a sizable proportion of income growth since the 1890s. It is also
shown that access to public transport increased both the probability of commuting and
distance commuted but had little or no direct effect on the probability of being employed or
earnings. We argue that these results are consistent with the search and matching framework;
commuting led to workers finding jobs more suited to their skills and to better matches with
employers. Finally, we provide descriptive evidence from contemporary sources to describe
the broader impacts of commuting on improving quality of life in the early-twentieth century.”