A new research paper from the Ronzetti Initiative for the Study of Labor Markets predicts that working from home (WFH) will stick after the pandemic ends, with 20% of full workdays to be performed remotely long-term versus 5% previously. It also estimates a 5% productivity uplift from WFH:
We survey more than 30,000 Americans over multiple waves to investigate whether WFH will stick, and why. Our data say that 20 percent of full workdays will be supplied from home after the pandemic ends, compared with just 5 percent before.
We develop evidence on five reasons for this large shift: better-than-expected WFH experiences, new investments in physical and human capital that enable WFH, greatly diminished stigma associated with WFH, lingering concerns about crowds and contagion risks, and a pandemic – driven surge in technological innovations that support WFH.
We also use our survey data to project three consequences: First, employees will enjoy large benefits from greater remote work, especially those with higher earnings.
Second, the shift to WFH will directly reduce spending in major city centers by at least 5-10 percent relative to the pre-pandemic situation.
Third, our data on employer plans and the relative productivity of WFH imply a 5 percent productivity boost in the post-pandemic economy due to re-optimized working arrangements. 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.
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.
My view is that a hybrid model, whereby employees work part from home and part at the office, is most enticing long-term.
This hybrid model offers the best trade-off in terms flexibility and productivity, and seems to be preferred by most employees according to recent workplace surveys.
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