Why Working from Home Will Stick

By Jose Maria Barrero, Nicholas Bloom, Steven J. Davis. Social Science Research Network, 2020

847 citations recorded by the source corpus.

COVID-19 drove a mass social experiment in working from home (WFH). We surveymore than 30,000 Americans over multiple waves to investigate whether WFH will stick, and why. Our data say that 20 percent of full workdays will be supplied from home after the pandemic ends, compared with just 5 percent before. We develop evidence on five reasons for this large shift: better-than-expected WFH experiences, new investments in physical and human capital that enable WFH, greatly diminished stigma associated with WFH, lingering concerns about crowds and contagion risks, and a pandemic-driven surge in technological innovations that support WFH. We also use our survey data to project three consequences: First, employees will enjoy large benefits from greater remote work, especially those with higher earnings. Second, the shift to WFH will directly reduce spending in major city centers by at least 5-10 percent relative to the pre-pandemic situation. Third, our data on employer plans and the relative productivity of WFH imply a 5 percent productivity boost in the post-pandemic economy due to re-optimized working arrangements. Only one-fifth of this productivity gain will show up in conventional productivity measures, because they do not capture the time savings from less commuting.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/7105093903a0e084b40bbbb923c86475549837d7

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Economics and Econometrics

Citations in the corpus

Who on Earth Can Work from Home? (2020, background): “Barreo et al. (2020) shows that in the United States, only two-thirds of respondents had an internet connection that was strong enough to sustain video”
Work from Home Before and After the COVID-19 Outbreak (2020, positive): “These facts, which rely importantly on the retrospective information in our survey that is not available in the CPS or Barrero et al. (2021) surveys, help justify our focus on the substitution and adoption channels in explaining the rise in WFH during the pandemic, and they will motivate a number of”
From Mancession to Shecession: Women’s Employment in Regular and Pandemic Recessions (2021, background): “…have paid the fixed cost of adopting remote work; learning by doing has taken place; employers have realized that working from home does not have to result in lower productivity; and employers have started to appreciate the savings from needing much less office space (Barrero et al. 2021).”
The Impact of Covid-19 on Productivity (2020, neutral): “…al. (2020), Forsythe et al. (2020) and Cajner et al. (2020) show large and heterogeneous labor 6 It is perhaps odd to think of the pandemic as increasing firms’ productivity, but in the case of working from home there is evidence firms sub-optimally adopted this pre-pandemic (Barrero et al. 2021).”
The Impact of COVID-19 on US Firms (2021, background): “…2020, Papaniklaou and Schmidt 2020, and Buffington et al. 2020), labor markets (e.g. Chetty et al. 2020, Kahn et al. 2020, Cajner et al. 2020 and Barrero et al. 2020b), and its particularly damaging impact on women and lower educated groups (e.g. Adams-Prassl et al. 2020, Alon et al. 2020,…”
COVID-19 Is Also a Reallocation Shock (2020, background): “basis, and eurozone economies shrank at a 14.8 percent annualized rate. In the United States, nearly 28 million persons filed new claims for unemployment benefits over the six-week period ending April 25. The US economy shrank an annualized rate of 5.0 percent in the first quarter of 2020 and 32.9 p”