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Do Municipal Residency Laws Affect Labour Market Outcomes?

Department of Economics, Bradley University, Peoria, Illinois 61625, USA KMO{at}BRADLEY.EDU

Studies investigating the economic effects of residency laws on municipal labour markets have not obtained consistent results. Residency laws either had no effect; decreased compensation for police and firefighters but had no effect on employment; or increased employment for police but had no effect on compensation. This study re-examines the effects of residency laws using newer data, relatively large samples and cities with a wide range of populations and data for both protective services. It is found that residency laws do not affect compensation and employment for either police or firefighters. Possible explanations for the results are non-compliance with the laws or variations in who is affected by the laws.

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