Spatial Implications of Telecommuting in the United States

Telecommuting came roaring to the forefront of the American workplace in the spring of 2020. While no more than 8% of work was done remotely in 2019, shutdowns and social-distancing policies introduced at the onset of the Covid-19 pandemic pushed more than 1 out of every 3 American workers to telecommute. To reflect this shift, the research team aimed to update the spatial modeling toolbox to allow remote employment and develop a quantitative framework capable of analyzing the full range of reallocations, both within and across cities, which may result from its increasing popularity. The researchers build a quantitative spatial model in which some workers can substitute on-site effort with work done from home. The team quantifies their 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. Additionally, broader access to jobs reduces inequality across residential locations. The framework robustly predicts changes in residents and housing prices observed 2019—2021.