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The Zoom City: Working From Home, Urban Productivity and Land Use
Efthymia, Kyriakopoulouy; Picard, Pierre M
2022
 

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Keywords :
Working from home; land use; commuting
Abstract :
[en] Who will benefit and who will lose from a permanent increase in working from home (WFH)? This paper investigates the impact of WFH on cities of different sizes, highlights the dangers of too much WFH, and discusses aspects of the disagreement between workers and firms. Our results suggest that WFH raises urban productivity and average wages only in large cities. We also study the optimal fraction of WFH and show that workers-residents have incentives to adopt an inefficiently high WFH scheme. The implementation of remote work in the short run---at fixed rents and wages---implies higher benefits for long-distance commuters and lower benefits or even losses for short-distance ones. It also implies benefits for some firms and losses for others, which potentially explains the low prevalence of WFH before the pandemic. Finally, we show that advances in digital technology, which increase the productivity of remote workers, lead to increased welfare benefits. A calibration exercise for the average and the largest European capital cities sheds more light on the impact of WFH on cities of different sizes.
Research center :
Department of Economics and Management, University of Luxembourg
Disciplines :
Microeconomics
Author, co-author :
Efthymia, Kyriakopoulouy
Picard, Pierre M ;  University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Department of Economics and Management (DEM)
Language :
English
Title :
The Zoom City: Working From Home, Urban Productivity and Land Use
Publication date :
01 December 2022
Focus Area :
Sustainable Development
Available on ORBilu :
since 06 December 2022

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