Spatial Implications of Telecommuting
76 Pages Posted: 29 Jan 2021 Last revised: 18 Jul 2022
Date Written: December 9, 2020
We build a quantitative spatial model in which some workers can substitute on-site effort with work done from home. Ability and propensity to telecommute vary by education and industry. We quantify our framework to match the distribution of jobs and residents across 4,502 U.S. locations. A permanent increase in the attractiveness of telework results in a rich non-monotonic pattern of reallocations within and across cities. Workers who can telecommute experience welfare gains, and those who cannot suffer losses. Broader access to jobs reduces inequality across residential locations. Our framework robustly predicts changes in residents and housing prices observed 2019--2021.
Keywords: Covid-19, urban, work at home, commuting, spatial equilibrium
JEL Classification: E24, J81, R23, R41
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