A new study from the United States has found that the rise of remote work following the pandemic will boost productivity by 5% by eliminating wasteful commutes and spurring the use of new technologies:
The paper was co-authored by Jose Maria Barrero of the Instituto Tecnológico Autónomo de México, Nicholas Bloom of Stanford University and Steven J. Davis of the University of Chicago Booth School of Business and Hoover Institution…
The work-from-home boom will lift productivity in the U.S. economy by 5%, mostly because of savings in commuting time, the study says. The findings suggest the rapid adoption of new technology amid the pandemic will offer lasting economic gains, helping to boost sluggish productivity that has long weighed on global growth…
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“Our data on employer plans and the relative productivity of WFH imply a 5% productivity boost in the post-pandemic economy due to re-optimized working arrangements,” according to the paper. “Only one-fifth of this productivity gain will show up in conventional productivity measures, because they do not capture the time savings from less commuting.”
These results accord with those of Professor John Quiggin from the University of Queensland, who last year hailed the rise of working from home (WFH) as the biggest productivity increase of the century:
The average worker spends an hour on commuting every work day…
If working from home eliminated an hour of commuting, without changing time spent on work or reducing production, the result would be equivalent to a 13% increase in productivity (assuming a 38-hour working work).
If half the workforce achieved such a gain, it would be equivalent to a 6.5% increase in productivity for the labour force as a whole…
WFH has eliminated the need for millions of workers to waste money, fuel and time travelling into central locations to work. In turn, it has eliminated a wasteful part of the production process, as well as providing greater work/life flexibility.
That said, there are also losers from WFH, including young entrants to the labour market, which may miss out on the learning and mentoring provided through traditional office workplaces. There is also the increased risk of job outsourcing.
Ultimately, the benefits of remote work will be hashed out between employers, workers and unions. This will likely see most white collar industries move to a hybrid model, whereby employees work part from home and part at the office.
This hybrid model offers the best trade-off in terms flexibility and productivity, and seems to be preferred by most employees according to workplace surveys.