The Work-from-Home Technology Boon and its Consequences

Morris A. Davis; Andra C. Ghent; Jesse M. Gregory

doi:10.3386/w28461

The Work-from-Home Technology Boon and its Consequences

Morris A. Davis, Andra C. Ghent & Jesse M. Gregory

Working Paper 28461

DOI 10.3386/w28461

Issue Date February 2021

Revision Date April 2022

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 and recent real estate price data indicate that the pandemic induced a large change to the relative productivity of WFH, one that will permanently affect incomes, income inequality, and city structure.

Previously circulated as "The Work-at-Home Technology Boon and its Consequences." We thank Tim Landvoigt, Andrii Parkhomenko, Stijn Van Nieuwerburgh, and audiences at the AREUEA-ASSA Annual Meetings, Columbia University, the ECB 6th Annual Research Conference, Emory University, the Federal Reserve Bank of Philadelphia, HEC Montréal, INSEAD, ITAM, the London School of Economics, the MIT CRE Research Seminar, NBER Summer Institute, Peking University, Rutgers University, the Search and Matching in Macro and Finance (SaMMF) Housing Workshop, the University of Connecticut, the University of Oklahoma, the University of Texas-Austin, the University of Utah, and the Virtual Macro Seminar (VMACS) for helpful comments on earlier drafts. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
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The Work-from-Home Technology Boon and its Consequences

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