Working from Home and Consumption in Cities

Jean-Victor Alipour (), Oliver Falck, Simon Krause, Carla Krolage and Sebastian Wichert

No 10000, CESifo Working Paper Series from CESifo

Abstract: We estimate the impact of the Covid-induced shift to working from home (WFH) on offline consumer spending within cities. The analysis builds on a postcode-level panel (2019–2023) of novel cellphone mobility and payment card transaction data for 50 German metropolitan areas (MAs). Identification uses local differences in the exposure to the WFH shock, measured by neighbourhoods’ WFH potential: the fraction of residents with a teleworkable job. Difference-in-differences estimates show that higher WFH potential leads to persistent declines in morning mobility and higher local spending within MAs. We estimate an elasticity of spending with respect to WFH-induced mobility changes of -3.7%, driven by large MAs. Unlike in the US, the WFH shock did not spur business turnover, urban outmigration, or a sustained shift to e-commerce in Germany. We conclude that WFH primarily reshapes urban consumption by reallocating where people spend time.

Keywords: remote work; consumer spending; urban agglomerations; cities; spatial analysis; cellphone mobility (search for similar items in EconPapers)
JEL-codes: D1 J0 R1 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-eur, nep-lab and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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