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The Future of Work and Consumption in Cities after the Pandemic: Evidence from Germany

Author

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  • Jean-Victor Alipour
  • Oliver Falck
  • Simon Krause
  • Carla Krolage
  • Sebastian Wichert

Abstract

We estimate the impact of working from home (WFH) on the micro-geography of offline consumer spending in urban agglomerations. Our analysis draws on micro-geographic card-transaction data and WFH patterns in German cities between January 2019 and May 2022. We use a difference-in-differences design that exploits the spatially differential exposure to the WFH shock induced by Covid-19 through the local scope to expand WFH. Our estimates suggest that local spending increases by 2–3 percent per standard deviation higher pre-pandemic untapped WFH potential. These effects hold after the permanent lifting of pandemic restrictions, indicating persistent relocations of offline consumption within cities.

Suggested Citation

  • Jean-Victor Alipour & Oliver Falck & Simon Krause & Carla Krolage & Sebastian Wichert, 2022. "The Future of Work and Consumption in Cities after the Pandemic: Evidence from Germany," CESifo Working Paper Series 10000, CESifo.
    • Handle: RePEc:ces:ceswps:_10000
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    References listed on IDEAS

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    1. 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).
    2. Jean-Victor Alipour & Christina Langer & Layla O´Kane, 2021. "Is Working from Home Here to Stay? A Look at 35 Million Job Ads," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 22(06), pages 41-46, November.
    3. Barrero, Jose Maria & Bloom, Nick & Davis, Steven J., 2020. "Why Working From Home Will Stick," SocArXiv wfdbe, Center for Open Science.
    4. Liu, Sitian & Su, Yichen, 2021. "The impact of the COVID-19 pandemic on the demand for density: Evidence from the U.S. housing market," Economics Letters, Elsevier, vol. 207(C).
    5. Cevat Giray Aksoy & Jose Maria Barrero & Nicholas Bloom & Steven J. Davis & Mathias Dolls & Pablo Zarate, 2022. "Working from Home Around the World," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 53(2 (Fall)), pages 281-360.
    6. Arjun Ramani & Nicholas Bloom, 2021. "The Donut Effect of Covid-19 on Cities," NBER Working Papers 28876, National Bureau of Economic Research, Inc.
    7. Adams-Prassl, Abi & Boneva, Teodora & Golin, Marta & Rauh, Christopher, 2020. "Inequality in the impact of the coronavirus shock: Evidence from real time surveys," Journal of Public Economics, Elsevier, vol. 189(C).
    8. Joel Alcedo & Alberto Cavallo & Bricklin Dwyer & Prachi Mishra & Antonio Spilimbergo, 2022. "Back to Trend: COVID Effects on E-commerce in 47 Countries," NBER Working Papers 29729, National Bureau of Economic Research, Inc.
    9. Alipour, Jean-Victor & Falck, Oliver & Schüller, Simone, 2020. "Germany's Capacities to Work from Home," IZA Discussion Papers 13152, Institute of Labor Economics (IZA).
    10. Alipour, Jean-Victor & Falck, Oliver & Schüller, Simone, 2023. "Germany’s capacity to work from home," European Economic Review, Elsevier, vol. 151(C).
    11. Delventhal, Matthew J. & Kwon, Eunjee & Parkhomenko, Andrii, 2022. "JUE Insight: How do cities change when we work from home?," Journal of Urban Economics, Elsevier, vol. 127(C).
    12. Jean-Victor Alipour & Christina Langerand & Layla O’Kane, 2021. "Is Working from Home Here to Stay? A Look at 35 Million Job Ads," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 22(06), pages 44-46, November.
    13. Haiqiang Chen & Wenlan Qian & Qiang Wen, 2021. "The Impact of the COVID-19 Pandemic on Consumption: Learning from High-Frequency Transaction Data," AEA Papers and Proceedings, American Economic Association, vol. 111, pages 307-311, May.
    14. Spilimbergo, Antonio & Alcedo, Joel & Cavallo, Alberto & Dwyer, Bricklin & Mishra, Prachi, 2022. "E-commerce During Covid: Stylized Facts from 47 Economies," CEPR Discussion Papers 17001, C.E.P.R. Discussion Papers.
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    Cited by:

    1. Jan Bruha & Hana Bruhova Foltynova, 2023. "Long-Term Impacts of the COVID-19 Pandemic on Working from Home and Online Shopping: Evidence from a Czech Panel Survey," Working Papers 2023/9, Czech National Bank.

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    More about this item

    Keywords

    work from home; consumer spending; urban agglomerations; cities; micro-spatial analysis;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • J00 - Labor and Demographic Economics - - General - - - General

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