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The Big Shift in Working Arrangements: Eight Ways Unusual

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  • Davis, Steven J.

    (Hoover Institution)

Abstract

The COVID-19 pandemic instigated a big shift in working arrangements. I first describe the scale of this shift in the United States, drawing on the Survey of Working Arrangements and Attitudes and other sources. I then review differences, circa 2023, in work-from-home rates across industries, demographic groups, and countries. The big shift had surprisingly benign (or even positive) effects on productivity, which is one reason it has endured. Compared to other shocks that strike modern economies, the big shift is also unusual in other respects: It relaxes time budget constraints, improves flexibility in time use, enhances individual autonomy, relaxes locational constraints, drives a major re-sorting of workers to jobs and employers, and alters the structure of wages. The big shift also reduces wage-growth pressures during the transition to new working arrangements and life styles. The shift benefits workers, on average, even as it lowers non-labor costs and real product wages for firms.

Suggested Citation

  • Davis, Steven J., 2024. "The Big Shift in Working Arrangements: Eight Ways Unusual," IZA Discussion Papers 16932, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp16932
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    References listed on IDEAS

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    1. Bloom, Nicholas & Davis, Steven J. & Hansen, Stephen & Lambert, Peter John & Sadun, Raffaella & Taska, Bledi, 2023. "Remote work across jobs, companies and space," LSE Research Online Documents on Economics 121302, London School of Economics and Political Science, LSE Library.
    2. Shaun Larcom & Ferdinand Rauch & Tim Willems, 2017. "The Benefits of Forced Experimentation: Striking Evidence from the London Underground Network," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 132(4), pages 2019-2055.
    3. Jose Maria Barrero & Nicholas Bloom & Steven J. Davis & Brent Meyer & Emil Mihaylov, 2022. "The Shift to Remote Work Lessens Wage-Growth Pressures," FRB Atlanta Working Paper 2022-7, Federal Reserve Bank of Atlanta.
    4. 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.
    5. David Autor & Arindrajit Dube & Annie McGrew, 2023. "The Unexpected Compression: Competition at Work in the Low Wage Labor Market," NBER Working Papers 31010, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    COVID-19; work from home; remote work; productivity; job amenities; time savings; flexibility in time use; personal autonomy; locational constraints; Great Re-Sorting; wages;
    All these keywords.

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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