Winners and Losers from the Work-from-Home Technology Boon

Morris Davis, Andra Ghent and Jesse M. Gregory

No 33284, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We model how an increase in Work-from-Home (WFH) productivity differentially affects workers using a framework in which some workers cannot work offsite, some are hybrid, and some are completely remote. The improvement in WFH productivity increases housing demand and thus housing prices since housing is inelastically supplied. Because workers in non-telecommutable occupations must consume housing but their total factor productivity does not increase, the rise in house prices reduces their welfare. The welfare decline is equivalent to 1-9% of consumption, depending on how substitutable WFH is with onsite work, and it arises despite measured income of all workers increasing.

JEL-codes: O33 O41 R12 R33 (search for similar items in EconPapers)
Date: 2024-12
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