A New Equilibrium: COVID-19 Lockdowns and WFH Persistence

Laura Ketter, Todd Morris () and Lizi Yu ()
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Laura Ketter: University of Queensland
Todd Morris: University of Queensland
Lizi Yu: University of Queensland

No 17975, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper documents a robust link between COVID-19 lockdowns and the uptake and persistence of working from home (WFH) practices. Exploiting rich longitudinal data, we use a difference-in-differences strategy to compare office workers in three heavily locked-down Australian states to similar workers in less affected states. Locked-down workers sustain 43% higher WFH levels through 2023 — 0.5 days per week — with a monotonic dose–response relationship. Persistence is driven by adjustments on both sides of the labor market: employers downsize office space and open remote/hybrid positions, while employees relocate away from city centers and invest in home offices and technology.

Keywords: COVID-19; persistence; WFH; work from home; lockdowns; habit formation (search for similar items in EconPapers)
JEL-codes: I18 J22 M54 (search for similar items in EconPapers)
Date: 2025-06
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