Economics Working Papers

Publication Date

4-13-2020

Number

20007

Abstract

The case for remote work goes well beyond its use during the covid-19 global pandemic. Over the last ten years, research from a variety of subdisciplines in economics and other social sciences collectively makes a strong case for the viability of remote work for the long-run. This paper brings this research together to argue remote work (also called telework) is likely to become far more common in the future for four reasons. First, the productivity of individual workers who switch to remote work is comparable or higher than their colocated peers, at least in some industries. Second, matching firms to geographically distant workers is becoming easier thanks to technological and social developments. Third, remote workers tend to be cheaper because workers value geographic flexibility and the ability to work remotely. Fourth, the benefits of knowledge spillovers from being physically close to other knowledge workers has been falling and may no longer exist in many domains of knowledge. While the prevalence of remote work (pre-covid-19) is small, I show it was already rising rapidly with plenty of room to continue growing. Finally, I argue remote work has positive externalities and should be promoted by policy-makers.

JEL Classification

J4

Version History

Original Release Date: April 13, 2020

Departments

Department of Economics, Iowa State University

File Format

application/pdf

Length

38 pages

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