Dual Earners, Urban Labor Markets and Housing Demand

This paper replicates Costa and Kahn's analysis of locational choices of couples of highly educated persons for the Netherlands. We find increasing concentration of such power couples in the urbanized western part of the country. This trend occurs in spite of the absence of an urban wage premium for university-educated workers and the concentration of 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 housing. Their commutes are relatively short when it is taken into account that it is more difficult for these households to find suitable combinations of employment and residence locations than it is for single earner households. A probable explanation for these findings is that power couples use their relatively large purchasing power to outbid other households from locations that are especially attractive t!o them, as is predicted by household location theory.