How the rise of teleworking will reshape labor markets and cities

Toshitaka Gokan, Sergey Kichko, Jesse A. Matheson () and Jacques-François Thisse ()
Additional contact information
Toshitaka Gokan: Institute of Developing Economies
Jesse A. Matheson: University of Sheffield
Jacques-François Thisse: Université catholique de Louvain, LIDAM/CORE, Belgium

No 2024010, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: Since 2020, London experienced a 400% increase in teleworking among skilled workers. We propose a model that studies the implications of teleworking on (i) the residential structure of cities, (ii) the wage structure between skilled and unskilled workers, and (iii) the provision of local service in central and residential areas. Increased teleworking reduces the willingness to pay for residential proximity to the city center, and thus induces the residential movement of skilled workers towards the suburbs. The magnitude of this structural change, and its effect on labor markets and skilled/unskilled wage inequality, depends on the desirability of local services available in central and residential areas. In a two-city extension, teleworking moves skilled workers from the productive (and expensive) city to the less productive city. This has implications for residential structure and individual welfare in both cities. We find empirical evidence on changes in housing prices, skilled wage premium, and location changes for local services businesses in England consistent with the model’s predictions.

Keywords: Telecommuting; working from home; local labor markets; local consumer services; gentrified cities; inter-city commuting (search for similar items in EconPapers)
JEL-codes: J60 R00 (search for similar items in EconPapers)
Pages: 57
Date: 2024-06-04
New Economics Papers: this item is included in nep-dcm and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://dial.uclouvain.be/pr/boreal/en/object/bore ... tastream/PDF_01/view (application/pdf)

Related works:
Working Paper: How the Rise of Teleworking Will Reshape Labor Markets and Cities (2022)
Working Paper: How the rise of teleworking will reshape labor markets and cities (2022)
Working Paper: How the rise of teleworking will reshape labor markets and cities? (2022)
Working Paper: How the rise of teleworking will reshape labor markets and cities (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2024010

Access Statistics for this paper

More papers in LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium). Contact information at EDIRC.
Bibliographic data for series maintained by Alain GILLIS ().