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

Author

Listed:
  • 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/en/research-output/discussion-papers/discussion-papers#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, 2021. "Simultaneous supply and demand constraints in input-output networks: The case of Covid-19 in Germany, Italy, and Spain," Papers 2101.07818, arXiv.org, revised May 2021.
    3. Gottlieb, Charles & Grobovšek, Jan & Poschke, Markus & Saltiel, Fernando, 2021. "Working from home in developing countries," European Economic Review, Elsevier, vol. 133(C).
    4. Jean-Victor Alipour & Oliver Falck & Simone Schüller, 2020. "Homeoffice während der Pandemie und die Implikationen für eine Zeit nach der Krise," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 73(07), pages 30-36, July.
    5. Anton Pichler & Marco Pangallo & R. Maria del Rio-Chanona & Franc{c}ois Lafond & J. Doyne Farmer, 2021. "In and out of lockdown: Propagation of supply and demand shocks in a dynamic input-output model," Papers 2102.09608, arXiv.org.
    6. 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.
    7. 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.

    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

    NEP fields

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