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The Geography of Remote Work

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Listed:
  • Lukas Althoff
  • Fabian Eckert
  • Sharat Ganapati
  • Conor Walsh

Abstract

Big city economies specialize in business service industries whose workers’ local spending in turn supports a large local consumer service industry. Business service jobs have a high remote work potential. If remote work becomes more prevalent, many business service workers may leave expensive cities and work from elsewhere withdrawing spending from the local non-tradable service industries dependent on their demand. We use the recent COVID-19-induced increase in remote work to test for the strength of this mechanism and find it to be strong. As a result, low-skill service workers in big cities bore most of the pandemic’s economic impact. Our findings have broader implications for the distributional consequences of the US economy’s transition to more remote work.

Suggested Citation

  • Lukas Althoff & Fabian Eckert & Sharat Ganapati & Conor Walsh, 2021. "The Geography of Remote Work," NBER Working Papers 29181, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:29181
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    More about this item

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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