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The Effects of Working From Home on COVID-19 Infections and Production - A Macroeconomic Analysis for Germany

Author

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  • Harald Fadinger
  • Jan Schymik

Abstract

We study the impact of confinement on infection risk and on the German economy. We first document that regions whose industry structure allows for a large fraction of work to be done at home also experienced much fewer Covid-19 cases and fatalities. We estimate the effect of working from home using a simple epidemiological model and show that it is very effective in reducing infections. Based on this observation, we then use a calibrated structural model of the German economy with input-output linkages to assess the economic cost of imposing social distancing rules in the workplace. We also discuss industry- and region-based policies for reducing confinement. Our model identifies the industries and regions with the largest value added gains per worker sent back to the workplace. Finally, we discuss alternative policies of sustaining maximum output while exposing as few workers as possible to infection risks.

Suggested Citation

  • Harald Fadinger & Jan Schymik, 2020. "The Effects of Working From Home on COVID-19 Infections and Production - A Macroeconomic Analysis for Germany," CRC TR 224 Discussion Paper Series crctr224_2020_167, University of Bonn and University of Mannheim, Germany.
    • Handle: RePEc:bon:boncrc:crctr224_2020_167
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    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp167
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    Citations

    RePEc Biblio mentions

    As found on the RePEc Biblio, the curated bibliography for Economics:
    1. > Economics of Welfare > Health Economics > Economics of Pandemics > Specific pandemics > Covid-19 > Economic consequences > Employment and Work > Work from home

    Citations

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    Cited by:

    1. Niklas Garnadt & Monika Schnitzer & Steffen Viete, 2020. "Räumliche Flexibilisierung durch zunehmende Homeoffice-Nutzung," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 100(9), pages 661-666, September.
    2. Anton Pichler & J. Doyne Farmer, 2022. "Simultaneous supply and demand constraints in input–output networks: the case of Covid-19 in Germany, Italy, and Spain," Economic Systems Research, Taylor & Francis Journals, vol. 34(3), pages 273-293, July.
    3. Gottlieb, Charles & Grobovšek, Jan & Poschke, Markus & Saltiel, Fernando, 2021. "Working from home in developing countries," European Economic Review, Elsevier, vol. 133(C).
    4. Pichler, Anton & Pangallo, Marco & del Rio-Chanona, R. Maria & Lafond, François & Farmer, J. Doyne, 2020. "In and out of lockdown: Propagation of supply and demand shocks in a dynamic input-output model," INET Oxford Working Papers 2021-18, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford, revised Feb 2021.
    5. Jean-Victor Alipour & Oliver Falck & Simone Schüller, 2020. "Working from Home during the Pandemic and the Post-Crisis Implications," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 73(07), pages 30-36, July.
    6. Qianxue Zhang, 2022. "The Hubei lockdown and its global impacts via supply chains," Review of International Economics, Wiley Blackwell, vol. 30(4), pages 1087-1109, September.
    7. Yugang He, 2022. "Home Production: Does It Matter for the Korean Macroeconomy during the COVID-19 Pandemic?," Mathematics, MDPI, vol. 10(12), pages 1-12, June.
    8. Gottlieb Charles & Grobovšek Jan & Poschke Markus & Saltiel Fernando, 2022. "Lockdown Accounting," The B.E. Journal of Macroeconomics, De Gruyter, vol. 22(1), pages 197-210, January.
    9. Pichler, Anton & Pangallo, Marco & del Rio-Chanona, R. Maria & Lafond, François & Farmer, J. Doyne, 2022. "Forecasting the propagation of pandemic shocks with a dynamic input-output model," Journal of Economic Dynamics and Control, Elsevier, vol. 144(C).
    10. Islamaj,Ergys & Le,Duong Trung & Mattoo,Aaditya, 2021. "Lives versus Livelihoods during the COVID-19 Pandemic : How Testing Softens the Trade-off," Policy Research Working Paper Series 9696, The World Bank.
    11. Bamieh, Omar & Ziegler, Lennart, 2022. "Are remote work options the new standard? Evidence from vacancy postings during the COVID-19 crisis," Labour Economics, Elsevier, vol. 76(C).
    12. Vahagn Jerbashian & Montserrat Vilalta-Bufí, 2022. "Working from Home in European Countries before and during the Covid-19 Pandemic," CESifo Working Paper Series 9932, CESifo.
    13. Alipour, Jean-Victor & Falck, Oliver & Schüller, Simone, 2023. "Germany’s capacity to work from home," European Economic Review, Elsevier, vol. 151(C).
    14. Fadinger, Harald & Schymik, Jan & Alipour, Jean-Victor, 2020. "My Home Is My Castle -- The Benefits of Working from Home During a Pandemic Crisis: Evidence from Germany," CEPR Discussion Papers 14871, C.E.P.R. Discussion Papers.
    15. Anton Pichler & Marco Pangallo & R. Maria del Rio-Chanona & Franc{c}ois Lafond & J. Doyne Farmer, 2020. "Production networks and epidemic spreading: How to restart the UK economy?," Papers 2005.10585, arXiv.org.
    16. Vahagn Jerbashian & Montserrat Vilalta-Bufí, 2022. "Working from home, pandemic, occupations, industries," UB School of Economics Working Papers 2022/427, University of Barcelona School of Economics.
    17. Zhang, Qianxue, 2021. "Supply shocks in China hit the world economy via global supply chains," The Warwick Economics Research Paper Series (TWERPS) 1323, University of Warwick, Department of Economics.

    More about this item

    Keywords

    Covid19; Corona; home work; infection; growth; industry; input-output;
    All these keywords.

    JEL classification:

    • E - Macroeconomics and Monetary Economics
    • J - Labor and Demographic Economics

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