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Optimal teleworking agreements vs. yearning for normality when vaccine is on the horizon

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  • Jacek Rothert

    (United States Naval Academy
    Group for Research in Applied Economics (GRAPE))

Abstract

During a pandemic, companies may adopt teleworking agreements even if they lower current productivity. If managers (or policymakers) want to project an image of ``return to normality'', completely orthogonal to any economic or health outcomes, the scope of teleworking agreements is lower but constant in a stationary equilibrium. In response to the news about upcoming vaccine, rational managers always increase the scope of teleworking agreements, unless the desire to project the image of ``return to normality'' is sufficiently strong, effectively creating a reopening-smoothing motive. The ``return to normality'' may be premature if managers do not understand Lucas' Critique.

Suggested Citation

  • Jacek Rothert, 2021. "Optimal teleworking agreements vs. yearning for normality when vaccine is on the horizon," GRAPE Working Papers 56, GRAPE Group for Research in Applied Economics.
    • Handle: RePEc:fme:wpaper:56
    as

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    File URL: http://grape.org.pl/WP/56_Rothert_website.pdf
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    References listed on IDEAS

    as
    1. Erik Brynjolfsson & John J. Horton & Adam Ozimek & Daniel Rock & Garima Sharma & Hong-Yi TuYe, 2020. "COVID-19 and Remote Work: An Early Look at US Data," NBER Working Papers 27344, National Bureau of Economic Research, Inc.
    2. Lucas, Robert Jr, 1976. "Econometric policy evaluation: A critique," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 1(1), pages 19-46, January.
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    More about this item

    Keywords

    Covid-19; teleworking; Lucas' Critique; alternative working arrangements;
    All these keywords.

    JEL classification:

    • I19 - Health, Education, and Welfare - - Health - - - Other
    • M5 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics

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