The Impact of Reduced Commuting on Labor Supply and Household Welfare: A Post-Pandemic Analysis

Yi Ji, Myrto Oikonomou, Carlo Pizzinelli, Ippei Shibata and Marina Tavares

No 2024/094, IMF Working Papers from International Monetary Fund

Abstract: This paper examines the impact of changes in commuting time on welfare and labor supply in the aftermath of the COVID-19 pandemic. Utilizing data from the American Time Use Survey, we observe a shift in commuting time and working hours across occupations with varying ability of telework after the pandemic. We develop a household model of labor supply that accounts for commuting time, and we characterize how changes in commuting time impact individuals' and spouses' labor supply. We calibrate the model to the data. Our findings reveal that the observed post-pandemic decline in commuting time yields significant welfare gains: between 1.5 to 4.5 percent of consumption equivalents for households where at least one spouse experiences reduced commuting.

Keywords: Commuting time; Working from home; Labor Supply; Welfare Gains (search for similar items in EconPapers)
Pages: 37
Date: 2024-05-03
New Economics Papers: this item is included in nep-lma, nep-tre and nep-ure
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