Dual Earners, Urban Labour Markets and Housing Demand

Abstract

This chapter replicates Costa and Kahn's analysis of locational choices of highly educated couples for the Netherlands. We find increasing concentration of such power couples in the urbanised western part of the country. This trend occurs in spite of the absence of an urban wage premium and the concentration of traffic congestion there. We find that power couples locate more often in medium sized and larger cities than otherwise comparable households and that they are relatively often owner-occupiers and live in more expensive houses. Their commuting time is relatively short when it is taken into account that it is more difficult for those households to find suitable arrangements of employment and residence than it is for single earner households. A likely explanation for these findings is that power couples use their relatively large purchasing power to outbid other households from locations that are especially attractive to them, as is predicted by household location theory.