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Exchange rate effects on cross-border commuting: evidence from the Swiss–Italian border
[Migration with endogenous moving costs]

Author

Listed:
  • Piera Bello
Abstract
Are cross-border workers responsive to changes in the exchange rate between the home and host countries’ currencies? I answer this question by examining the effects of the appreciation of the Swiss franc (CHF) relative to the euro (EUR) on labour supply decisions of Italian cross-border workers. I use hourly data on traffic flows in Ticino, the southernmost canton of Switzerland, together with three additional datasets (the Cross-border Commuter Statistics, the Swiss Earnings Structure Survey, and Google trend data). The results show that a 10% appreciation in the CHF increases the number of cars along the Swiss–Italian border by 1.6–2.7% more than in the rest of the canton. This effect is found only during specific time intervals, which differ according to the direction of traffic flow; specifically, from Italy to Switzerland in early morning, from Switzerland to Italy in the afternoon, and in both directions in late morning. Moreover, when the CHF is stronger, more people from Italy look for jobs in Ticino, and the number of cross-border workers increases in municipalities within a driving distance of up to 10 km from the border. Finally, additional evidence suggests that cross-border workers also react to the appreciation by increasing their number of hours worked.

Suggested Citation

  • Piera Bello, 2020. "Exchange rate effects on cross-border commuting: evidence from the Swiss–Italian border [Migration with endogenous moving costs]," Journal of Economic Geography, Oxford University Press, vol. 20(4), pages 969-1001.
    • Handle: RePEc:oup:jecgeo:v:20:y:2020:i:4:p:969-1001.
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    File URL: http://hdl.handle.net/10.1093/jeg/lbz025
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    Citations

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    Cited by:

    1. Dicarlo, Emanuele, 2022. "How Do Firms Adjust to Negative Labor Supply Shocks? Evidence from Migration Outflows," IZA Discussion Papers 14994, Institute of Labor Economics (IZA).
    2. Jason Poulos & Andrea Albanese & Andrea Mercatanti & Fan Li, 2021. "Retrospective causal inference via matrix completion, with an evaluation of the effect of European integration on cross-border employment," LISER Working Paper Series 2021-07, Luxembourg Institute of Socio-Economic Research (LISER).
    3. Piera Bello, 2021. "The environmental cost and the accident externality of driving: Evidence from the Swiss franc's appreciation," Economic Inquiry, Western Economic Association International, vol. 59(3), pages 1440-1458, July.
    4. Emanuele Dicarlo, 2022. "How do firms adjust to a negative labor supply shock? Evidence form migration outflows," Temi di discussione (Economic working papers) 1361, Bank of Italy, Economic Research and International Relations Area.

    More about this item

    Keywords

    Geographic labour mobility; traffic flows; labour supply;
    All these keywords.

    JEL classification:

    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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