Work-from-Home, Relocation, and Shadow Effects: Evidence from Sweden

Abstract

In this paper, we explore new and significant economic geography features of the work-from-home (WFH) revolution. The increased practice of WFH has prompted a redistribution of working populations between urban and rural locations. Using a uniquely detailed and comprehensive individual-level nationwide Swedish micro-dataset, we analyse shifts in commuting distances pre- and post-pandemic and explore their association with teleworkability. Beyond the well-documented centrifugal ‘donut’-type effects within cities, our study finds a significant centripetal ‘shadow’ effect on smaller cities. This phenomenon draws workers relocating from outside metropolitan regions closer to major urban areas, reinforcing urbanization trends contrary to the expectations of geographic decentralization enabled by remote work. These nuanced dynamics—highlighting simultaneous dispersion at the local level and concentration within the urban system—reveal new knowledge into the complex interplay between remote work, urbanization, and regional development.

Keywords: Working from home, agglomeration economies, regional distribution