When workplaces are reshaped by a tectonic shift — the influx of women into the workforce, the rise of computers — it typically takes time for economists, psychologists, sociologists and other scientists to gather data about the impact.
As employers suddenly moved to embrace remote work during the pandemic and the share of employed Americans working exclusively from home rose from 4 percent in 2019 to 54 percent in 2020, researchers set out to examine the impact of remote work Investigating workers and the economy is great. The first results are now becoming apparent. They show a mixed economic picture, where many workers and companies have made real gains from remote working arrangements and many have also had to bear costs.
Broadly speaking, the following picture emerges: Brick-and-mortar stores suffered in city centers because many people no longer commuted. Still, some types of businesses, such as grocery stores, were able to gain a foothold in the suburbs. At the same time, rents rose in affordable markets as remote and hybrid workers left expensive urban housing.
Working mothers have generally benefited from the flexibility of working remotely – more of them have been able to stay in the workforce. But remote work also appears to pose significant disadvantages for women’s career advancement.
Studies on productivity in home office arrangements are everywhere. Some studies link telecommuting to productivity declines of between 8 and 19 percent, while others find a decline of 4 percent for individual workers; Still other studies have shown productivity increases of 13 percent or even 24 percent.
Nick Bloom, an economist at Stanford University and a productive remote work expert, said the new set of studies shows that productivity in remote workplaces varies depending on the employer’s approach – such as well-trained managers to support remote employees and whether these employees have the opportunity to meet occasionally.
Researchers tend to agree that many workplaces have entered a new hybrid phase, with offices operating at about half their pre-pandemic levels and about a quarter of American workdays being done from home. This suggests that some of the effects of remote work may remain.
As Mr. Bloom put it, “This is the new normal.”
Urban city centers
Photos of urban city centers during the Corona lockdown are eerie, with quiet streets, withered office plants and dusty cubicles.
When about 50 million Americans began working from home in the early days of the pandemic, brick-and-mortar retail in inner cities suffered. The number of downtown clothing stores fell 8 percent from the end of 2019 to the end of 2021, according to a study using transaction data from 70 million Chase Bank customers. General stores in downtown areas — including everything from department stores to florists to booksellers — fell 7 percent, and grocery stores fell 2 percent.
Some of these companies followed remote workers to the suburbs. During this period, the number of grocery stores in the suburbs increased by about 3 percent, slightly outpacing the decline in cities, especially in suburbs where remote work levels were high.
In the coming years, retailers’ relocation from inner cities to suburbs will likely prove difficult for low-income workers who can’t afford to live in these sometimes affluent areas where retailers may hire. This problem is already visible in the Bay Area. Take the case of Maria Cerros-Mercado, who used to work at a salad shop in San Francisco, a 20-minute walk from her home. Now she uses Uber to commute from the city to the store’s new location in Mill Valley, an affluent suburb in Marin County.
However, some economists argue that many Americans will benefit from the effects of remote work, with rents likely to fall in rural and suburban areas. A recent study used data from postal service address changes, Zillow rent changes, and the construction industry to predict the potential rental effects of remote and hybrid work. The pandemic caused a temporary spike in rents in previously affordable areas — think Dallas; Manchester, N.H.; and in New York state – as many remote workers left the most expensive housing markets after giving up the daily commute. Economists say rents will fall again as the construction industry meets this new demand.
“If you look out, one of the big problems with housing over the last decade has been affordability,” said Jack Liebersohn, an economist at the University of California, Irvine. “This could help simply because people can live in cheaper areas where we can afford to build.”
And there may be an unexpected bonus: A study in the U.K. showed that burglaries fell by nearly 30 percent in areas with high work-from-home rates, which researchers attributed to the increase in “eyes on the street” in those neighborhoods.
Working women
For decades, a working mom’s schedule has felt like an equation that can’t be reconciled. Many women are still expected to be at their desks at 5 p.m. and at the same time as school pickup. They should be in the office and also available at home when their children cough and are turned away from daycare. (Sufficient data shows that this bond limits mothers more than fathers.)
Remote work will ease this conundrum somewhat, according to a study using pre-pandemic data from economists at the University of Virginia and the University of Southern California. In fields such as computer science, marketing and communications where telecommuting was welcomed from 2009 to 2019, employment rates for working mothers increased. There was an almost one-to-one relationship: As remote work increased by 2 percent, mothers’ employment also increased by 2 percent. Still, working mothers’ employment rates still lagged behind those of women without children, although remote work narrowed that gap.
Claudia Goldin, who was awarded the Nobel Prize in economics this week, has shown that women tend to seek more flexible jobs so they can take care of household chores. This has contributed to the gender pay gap.
While some working women, particularly mothers, might benefit from staying away, in this case women tend to suffer greater disadvantages. In a study of engineers at a Fortune 500 company, remote work negatively impacted the amount of feedback junior employees received about their work—with the disadvantages being more pronounced among women.
“Proximity has a greater impact on whether women find it easier to ask follow-up questions,” said Emma Harrington, an economist at the University of Virginia who led both the study on the impact of remote work on feedback and the study on the work of Force participation conducted by mothers.
Men seemed to find it easier to ask clarifying questions, even when they were away from colleagues.
Wherever they work, women may also face more undeserved questions about their productivity. In a series of studies involving more than 2,000 participants, researchers in Wisconsin and Canada found that both men and women were more likely than men to suspect women of avoiding work. Some of these employees worked from home and some did not.
When study participants saw video footage that an employee was away from their desk, 47 percent of the time attributed it to something unrelated to work; For men, it was attributed to activities outside of work only 34 percent of the time.
“It is possible that study participants are responding to the reality of the world, where women sometimes have more responsibility in the home,” added Ms. Harrington, who was not involved in this study.
Whether working from anywhere hurts or helps productivity is a burning question for managers.
Early evidence came in a 2013 paper by Mr. Bloom and others about a call center in China that allowed some employees to work mostly remotely for nine months, finding that productivity increased by 13 percent. Just under 10 percent of that increase was due to people taking fewer breaks, and 4 percent was due to people making more calls per minute because their work environment was quieter.
But during the pandemic, when millions of workers suddenly shifted to remote work, the impact was more complex. The arrangements had not been decided in advance. The switch to remote work was not voluntary. Therefore, the results were more scattered.
A study of an Asian information technology company’s remote workforce during the pandemic found an 8 to 19 percent drop in productivity. Another studied an American call center and found that when employees worked remotely, they made 12 percent fewer calls. On the other hand, a study on the productivity of economic researchers in the United States during the pandemic found an increase in their output of about 24 percent.
These different results leave some questions unanswered. “How on earth can you get a spread of more than 30 points between them?” asked Mr. Bloom. “It all depends on how the workers are managed. If you go fully remote with good management and good incentives and people meet in person, it can work. What doesn’t seem to work is sending people home without face-to-face conversations.”