Wage compensation for fly‐in/fly‐out and drive‐in/drive‐out commuters

Abstract

The fly‐in/fly‐Out (FIFO) or, drive‐in/drive‐out (DIDO) labour system is a long‐distance commuting work arrangement to attract workers towards remote mineral or fossil fuel extraction areas, where they work in shifts and then return to their usual place of residence located in a different region. Along with more and cheaper transportation alternatives, the use of FIFO/DIDO systems have importantly increased in last decades around the world, which has translated to FIFO/DIDO systems operating even when already established cities are present in extractive regions. This paper uses the case of Chile, one of the most important mining countries in the world, to explore whether and in what extent these labor systems influence wage compensations. We find that FIFO/DIDO commuters obtain an average wage compensation of 2.4 per cent per commuted hour.

The monetary subjective health evaluation for commuting long distances in Chile: A latent class analysis

“…Thus, we assume that all workers travel by car from residence to work place. Similarly to Paredes et al (), we argue that this is not a strong assumption considering that 88% of travel in Chile is made by car, bus or train (Conicyt, ). Histograms of both distances in kilometres and minutes are presented in Figure .…”

“…To make our results comparable with studies that compute the wage compensation for urban commuting (as opposed to long‐distance commuting), we expressed the commuting distance at 80 kilometres per hour as assumed by Paredes et al (). Thus, we can express the CLP$298 (US$0.47) per kilometre commuted as US$37.6 per hour commuted.…”

“…To identify long‐distance commuters we follow a similar definition as Jamett and Paredes () and Paredes et al (): long‐distance commuters are defined as those workers travelling between a place of residence and work place located in different political‐administrative areas. In particular, CASEN 2009 asks the interviewees to report their work commune and their commune of residence.…”

“…Long‐distance commuting (LDC), defined as the displacement of workers who live and work in different spatial locations, is a growing phenomenon in countries specialized in mining and quarrying industries such as Australia (De Silva, Johnson, & Wade, ; McKenzie, ), Canada (Storey & Shrimpton, ) and Chile (Aroca & Atienza, , ; Jamett & Paredes, ; Paredes, Soto, & Fleming, ). This form of geographical mobility—known also as fly‐in/fly‐out (FIFO) or drive‐in/drive‐out (DIDO) commuting system—has emerged as an alternative to migration and has gained considerable and growing attention in the empirical literature due to its different repercussions on local markets and economic efficiency (Huber & Nowotny, ; Nicholas & Welters, ; Paredes et al, ; Ryser, Markey, & Halseth, ).…”

“…Thus, a worker decides to perform LDC (as opposed to work in his region of residence) if the net utility of working in a different region is greater than working in the same region of residence. Particularly, Paredes et al () explain that LDC is a feasible alternative if and only if the wage in the work‐region is greater than wage in the residence‐region, once the difference in costs of living in different regions is taking into account. Using a dataset for Chile, they show that workers who carry out FIFO/DIDO have a wage premium of approximately 8.6% higher than workers living and working in the same region.…”