The donut effect of Covid-19 on cities

Nicholas Bloom and Arjun Ramani

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Using data from the US Postal Service and Zillow, we quantify the effect of Covid-19 on migration patterns and real estate markets within and across US cities. We find two key results. First, within large US cities, households, businesses, and real estate demand have moved from dense central business districts (CBDs) towards lower density suburban zip-codes. We label this the 'Donut Effect' reflecting the movement of activity out of city centers to the suburban ring. Second, while this observed reallocation occurs within cities, we do not see major reallocation across cities. That is, there is less evidence for large-scale movement of activity from large US cities to smaller regional cities or towns. We rationalize these findings by noting that working patterns post pandemic will frequently be hybrid, with workers commuting to their business premises typically three days per week. This level of commuting is less than pre-pandemic, making suburbs relatively more popular, but too frequent to allow employees to leave the cities containing their employer.

Keywords: Covid-19; US 'donut effect'; migration patterns; firm-specific shocks; earnings; coronavirus (search for similar items in EconPapers)
JEL-codes: N0 (search for similar items in EconPapers)
Pages: 38 pages
Date: 2021-09-02
New Economics Papers: this item is included in nep-geo, nep-mig and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (34)

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http://eprints.lse.ac.uk/113876/ Open access version. (application/pdf)

Related works:
Working Paper: The donut effect of Covid-19 on cities (2021)
Working Paper: The donut effect of Covid-19 on cities (2021)
Working Paper: The Donut Effect of Covid-19 on Cities (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:113876

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