The shift to remote work lessens wage-growth pressure

Jose Maria Barrero, Nicholas Bloom, Steven Davis, Brent Meyer and Emil Mihaylov

POID Working Papers from Centre for Economic Performance, LSE

Abstract: The recent shift to remote work raised the amenity value of employment. As compensation adjusts to share the amenity-value gains with employers, wage-growth pressures moderate. We find empirical support for this mechanism in the wage-setting behavior of U.S. employers, and we develop novel survey data to quantify its force. Our data imply a cumulative wage-growth moderation of 2.0 percentage points over two years. This moderation offsets more than half the real-wage catch-up effect that Blanchard (2022) highlights in his analysis of near-term inflation pressures. The amenity-values gains associated with the recent rise of remote work also lower Labor's share of national income by 1.1 percentage points. In addition, the "unexpected compression" of wages since early 2020 (Autor and Dube, 2022) is partly explained by the same amenity-value effect, which operates differentially across the earnings distribution.

Keywords: remote work; wage-growth pressure; shift; compensation; empirical; inflation; productivity (search for similar items in EconPapers)
Date: 2022-12-15
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://poid.lse.ac.uk/textonly/publications/downloads/poidwp060.pdf (application/pdf)

Related works:
Working Paper: The shift to remote work lessens wage-growth pressure (2023)
Working Paper: The shift to remote work lessens wage-growth pressure (2023)
Working Paper: The Shift to Remote Work Lessens Wage-Growth Pressures (2022)
Working Paper: The Shift to Remote Work Lessens Wage-Growth Pressures (2022)
Working Paper: The Shift to Remote Work Lessens Wage-Growth Pressures (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:cep:poidwp:060

Access Statistics for this paper

More papers in POID Working Papers from Centre for Economic Performance, LSE
Bibliographic data for series maintained by ().