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A New Norm? Exploring the Shift to Working From Home in the Post-Pandemic Labor Market

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  • Malak Kandoussi

    (EPEE, Université Paris-Saclay, University of Evry)

Abstract

This paper focuses on examining the impact of working from home on labor market outcomes using an extension of the search and matching model. The objective is to address the data gap to (i) explain the increase in the share of remote workers following the COVID-19 crisis; (ii) investigate the effects of this shift on labor market outcomes in two distinct areas; and (iii) assess the potential benefits of working from home in reducing inequalities between urban and rural regions. We show that although the Post-COVID economy suffers from the increase in commuting costs, both the decrease in the disutility in remote work and the increase in productivity of remoters offset this negative impact. We also show that when the disutility of remote work is sufficiently low, it lowers unemployment and wage inequalities between the urban and rural areas. Finally, we analyze the welfare of unemployed workers and economic wealth. It highlights the benefits of reducing remote work disutility.

Suggested Citation

  • Malak Kandoussi, 2023. "A New Norm? Exploring the Shift to Working From Home in the Post-Pandemic Labor Market," Documents de recherche 23-09, Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne.
    • Handle: RePEc:eve:wpaper:23-09
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    File URL: https://www.univ-evry.fr/fileadmin/mediatheque/ueve-institutionnel/03_Recherche/laboratoires/Epee/pub/WorkingPapers_CEPS_9.pdf
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    References listed on IDEAS

    as
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    3. Barrero, Jose Maria & Bloom, Nick & Davis, Steven J., 2020. "Why Working From Home Will Stick," SocArXiv wfdbe, Center for Open Science.
    4. Cevat Giray Aksoy & Jose Maria Barrero & Nicholas Bloom & Steven J. Davis & Mathias Dolls & Pablo Zarate, 2022. "Working from Home Around the World," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 53(2 (Fall)), pages 281-360.
    5. Jan Rouwendal, 2004. "Search Theory and Commuting Behavior," Growth and Change, Wiley Blackwell, vol. 35(3), pages 391-418, September.
    6. Künn, Steffen & Seel, Christian & Zegners, Dainis, 2020. "Cognitive Performance in the Home Office - Evidence from Professional Chess," IZA Discussion Papers 13491, Institute of Labor Economics (IZA).
    7. José María Barrero & Nicholas Bloom & Steven J. Davis, 2023. "The Evolution of Work from Home," Journal of Economic Perspectives, American Economic Association, vol. 37(4), pages 23-50, Fall.
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