Why working from home will stick
BibTeX
@techreport{barrero2021working,
title={Why working from home will stick},
author={Barrero, Jose Maria and Bloom, Nicholas and Davis, Steven J},
year={2021},
institution={National Bureau of Economic Research}
}
Abstract
COVID-19 drove a mass social experiment in working from home (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.
Notes and Excerpts
Data source is
an original cross-sectional survey of our design – the Survey of Working Arrangements and Attitudes (SWAA). We have fielded the survey about once a month since May 2020, thus far collecting over 30,000 responses from working-age Americans. We ask about working arrangements during the pandemic, personal experiences with WFH, worker preferences and employer plans about the extent of WFH after the pandemic ends, attitudes about contagion risks and vaccination, and much more.
The SWAA puts the following question to employed respondents: “After COVID, in 2022 and later, how often is your employer planning for you to work from home?” According to the responses, employers plan for workers to supply 21.3 (0.2) percent of full workdays from home after the pandemic ends. Roughly speaking, WFH is feasible for half of employees, and the typical plan for that half involves two workdays per week at home.
The average levels of desired WFH are high and similar across groups defined by age, sex, education, earnings, industry sector, and the presence of children. In contrast, employer plans for WFH in the post-pandemic economy rise steeply with education and earnings. These results suggest the benefits of the shift to WFH will flow mainly to the highly educated and well paid.
According to the 2018 American Community Survey, workers spent an average 54 minutes per day commuting to and from work before the pandemic.29 Recall that WFH rose from about 5% of workdays before COVID to 50% during the pandemic. Putting the pieces together, the COVID-induced shift to WFH yielded an aggregate reduction in commuting time of (0.5 minus 0.05)(150 million)(54/60 hours) = 61 million hours per work day during the pandemic. That amounts to (5/7)(30)(61) = 1.3 billion hours per month, or more than 15 billion hours from mid-March 2020 to March 2021. Since our survey data say that 20 (not 50) percent of full workdays will be supplied from home after the pandemic ends, our ballpark calculations imply that the COVID-induced shift to WFH will reduce aggregate commuting time by about 435 million hours per month in the post-pandemic economy.
Barrero et al. (2020a) find that Americans devote about 35% of their savings in commuting time to their primary jobs and about 60% to work activities of all sorts, including household chores and childcare. The allocation of time savings is broadly similar for men and women and across groups defined by race and ethnicity, but it differs markedly by education group and between persons with and without children at home. Their findings align well with American Time Use Survey data on how time allocations relate to WFH in 2017 and 2018, as analyzed in Pabilonia and Vernon (2020).
barrero202060 pabilonia2022telework
We supplement our data collection efforts with published data from the Job Flexibilities and Work Schedules module of the American Time Use Survey (ATUS). This survey module ran continuously in 2017 and 2018, yielding about 10,000 responses from wage and salary workers. According to the tabulations at https://www.bls.gov/news.release/flex2.t03.htm, only 14.7 percent of employees performed any full workdays from home before the pandemic. Among those who did, the frequency distribution of full WFH days is as follows: Less than once a month (18.4%), once a month (13.5 %), once every two weeks (13.1%), at least 1 day per week (10.2%), 1 to 2 days per week (17.4%), 3 to 4 days per week (12.8%), and 5 or more days per week (14.5%). Thus, we estimate the share of full workdays at home before the pandemic as 4.8 percent, computed as 100 times [ 0 ∗ 1 − .147 + .147 ∗ ( ) 0 ∗ 0.184 + 0.05 ∗ .135 + 0.1 ∗ .131 + 0.2 ∗ .102 + 0.3 ∗ .174 + 0.7 ∗ .128 + 1 ∗ .145 ]. We plot this 4.8% figure as the leftmost data point in the right panel of Figure 1. The full survey is at https://www.bls.gov/news.release/flex2.nr0.htm
Also, I like how the end of the paper has data-dense slides.