At the beginning of the COVID-19 epidemic in early 2020, there was a dramatic change in the way people work at home. Almost overnight, most white collar workers start working at their kitchen tables, garages, and home offices to avoid the risk of infection and to comply with home remedies. While employers perceive home-based work (WFH) as less than office work product in the regular periods (Bartik et al. 2020, Morikawa 2021), social segregation reduced the office work productivity so much that WFH produced significantly in comparison.
While initially considered a stopgap measure, as the epidemic dragged on both employers and employees it became accustomed to WFH and is now expecting a permanent increase in practice after the end of the epidemic. In the study, American workers reported that they expected a fourfold increase in the number of hours they would go to WFH further (Barrero et al. 2020). In a recent survey of 133 American executives, employers also expected a significant increase in the share of work done from home onwards (PwC 2021). Scandinavian employers also expect the WFH allocation to be more than the second post-epidemic (Mortensen and Wetterling 2020).
What happened during the epidemic that made this change permanently and how will it affect where we live, work, and our income goes forward? Instead of happening in 2020, the WFH transition has been slowly starting for more than 30 years. Different technological advances have contributed to our ability to work effectively at home. In the early 1990’s, affordable PCs using Microsoft Word and Excel became widely available. In the mid-1990s, job email became commonplace and Netscape IPO led the rise of information posted on the World Wide Web. In the early 2000’s, high-speed internet became widely available and in 2010 mobile phones became the standard smartphone. Finally, between 2010 and 2020 video conference technology has been made more accessible to remote conference locations around the world.
The common denominator of each of these innovations is that their impact on the ability to perform the work depends in part to a degree, on the increase in acquisition. It doesn’t make sense to write an email when no one is reading it, video conferencing becomes even more difficult when someone in an online dating site is slow, and so on. While most home office technologies are temporary, the technology becomes very useful after widespread adoption.
In a new paper (Davis et al. 2021), we state that the epidemic accelerated the adoption of widespread technology that enabled households to produce work in the domestic market, which permanently increased domestic production. To understand the effects of these changes in home production, we describe a model in which highly skilled workers choose how they will allocate their time between working at home or in the office. We think WFH is a highly skilled workforce, consistent with the detailed analysis of WFH performance provided by Dingel and Neiman (2020). There is no travel when you work from home, but the WFH product is different from the one in the office. Employees are highly skilled and prefer how much physical space to rent at home and (on behalf of firms) in the office. All employees decide where to stay, how much to spend, and how much to rent.
We use pre-epidemic model and data to measure the robustness of substitution between WFH and office work. Our strategy includes quality measurement, in pre-epidemic times, workers from the same industry and jobs but at different travel times make different decisions about how often they work at home. The degree to which a time allocation changes as a change in travel expenses has an effect on how WFH replacement work works in an office. We find that WFH is no substitute for office work that has significant implications for understanding the future of post-destruction workplaces. If office and home work are not the right motives, most employees in the future will do some office work and others at home each week or month rather than choosing the cornerstone solution for all office work or all WFH. This could reduce the capacity of workers and migration companies from major cities to remote parts of the country with favorable tax laws and reduce land costs. Therefore, our understanding of how changes in WFH technology will affect outcomes is closely related to the level of replacement between office work and WFH.
In addition to our estimation of rejection of full inclusion, a complete replacement is not in line with the historical evidence for WFH growth prior to anticipation to negotiate with the employer on what will be considered in the workplace. As Figure 1 shows, the largest increase in WFH in the pre-epidemic years was due to the allocation of sometimes domestic workers.
Figure 1 Assignment of EU workers working from home for a period of time and usually, 1995-2019.
Similarly, PWC (2021) reports that many employers expect a more hybrid office model where employees work 1-4 days a week in an office than when employees can work too far away or appear in the office only a few times. per month. Our results are also consistent with Ramani and Bloom (2021), which found that COVID-19 has resulted in redistribution of territories, especially within urban areas.
After placing the model in the first position, we mimic the model to understand the impact of the epidemic on WFH technology and its effects. We start with an early study – we call it 2019 – where college-educated workers work at home 20% of the time. Given the structure of the model, this undermines the WFH production rate before the onset of the epidemic. Then we study later – we call it 2022 – when college students double their homework, which is b.