Working Paper: CEPR ID: DP17431
Authors: Gianni De Fraja; Jesse Matheson; Paul D. Mizen; James Rockey; Shivani Taneja
Abstract: Remote working, at least some of the time, has rapidly become the new norm in many sectors. Remote working changes where workers spend much of their time, and because of this, it also changes the geographical location of demand, particularly in sectors which supply local personal services (LPS). We quantify this change for England and Wales. To do this, we use a bespoke, nationally representative, survey of nearly 35,000 working age adults, which predicts long-term changes in remote working and in LPS spending while at work. On average, we find that a neighbourhood to which people commute 20% less often experiences a decline in LPS spending of 7%. There is a clear geographic pattern to these spending changes: large decreases in LPS demand are concentrated in a small number of city-centre neighbourhoods, while increases in LPS demand are more uniformly distributed. Further analysis of neighbourhoods geographical and socio-demographic characteristics shows the least affluent neighbourhoods see least benefit from remote work.
Keywords: remote working; work-from-home; local labour markets; local personal services; retail industry; hospitality industry
JEL Codes: R12; J01; H12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| 20% reduction in commuting frequency (R41) | 7% decrease in LPS spending (H56) |
| each percentage decrease in commuting (R41) | decline in LPS spending (H56) |
| less affluent neighborhoods (R20) | benefit least from remote work (J29) |
| employment losses in city centers (R23) | increases in demand for LPS workers in residential suburbs (R23) |