Working Paper: NBER ID: w28461
Authors: Morris A. Davis; Andra C. Ghent; Jesse M. Gregory
Abstract: We study the impact of widespread adoption of work-from-home (WFH) technology using an equilibrium model where people choose where to live, how to allocate their time between working at home and at the office, and how much space to use in production. Motivated by cross-sectional evidence on WFH, we model WFH as a complement to work at the office. Simulations of the model indicate that the pandemic induced a large change to the relative productivity of WFH that substantially increased home prices and will permanently affect incomes, income inequality, and city structure.
Keywords: Work-from-home; Productivity; Income inequality; Urban structure
JEL Codes: O33; O41; R12; R33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| pandemic (F44) | increase in WFH productivity (J29) |
| increase in WFH productivity (J29) | increase in home prices (R31) |
| increase in WFH productivity (J29) | decline in office rents (R33) |
| pandemic (F44) | change in productivity dynamics between home and office work (J29) |
| increase in WFH productivity (J29) | increase in income inequality (D31) |