A New Norm? Exploring the Shift to Working From Home in the Post-Pandemic Labor Market

Malak Kandoussi
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Malak Kandoussi: EPEE, Université Paris-Saclay, University of Evry

No 23-09, Documents de recherche from Centre d'Études des Politiques Économiques (EPEE), Université d'Evry Val d'Essonne

Abstract: This paper focuses on examining the impact of working from home on labor market outcomes using an extension of the search and matching model. The objective is to address the data gap to (i) explain the increase in the share of remote workers following the COVID-19 crisis; (ii) investigate the effects of this shift on labor market outcomes in two distinct areas; and (iii) assess the potential benefits of working from home in reducing inequalities between urban and rural regions. We show that although the Post-COVID economy suffers from the increase in commuting costs, both the decrease in the disutility in remote work and the increase in productivity of remoters offset this negative impact. We also show that when the disutility of remote work is sufficiently low, it lowers unemployment and wage inequalities between the urban and rural areas. Finally, we analyze the welfare of unemployed workers and economic wealth. It highlights the benefits of reducing remote work disutility.

Pages: 57 pages
Date: 2023
New Economics Papers: this item is included in nep-dge and nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:eve:wpaper:23-09

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