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Zoomshock: The geography and local labour market consequences of working from home

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  • De Fraja, Gianni
  • Matheson, Jesse
  • Rockey, James

Abstract

The Covid-19 health crisis has led to a substantial increase in work done from home, which shifts economic activity across geographic space. We refer to this shift as a Zoomshock. The Zoomshock has implications for locally consumed services; much of the clientèle of restaurants, coffee bars, pubs, hair stylists, health clubs, and the like located near workplaces is transferred to establishments located near where people live. In this paper we measure the Zoomshock at a very granular level for UK neighbourhoods. We establish three important empirical facts. First, the Zoomshock is large; many workers can work-from-home and live in a different neighbourhood than they work. Second, the Zoomshock is very heterogeneous; economic activity is decreasing in productive city centres and increasing residential suburbs. Third, the Zoomshock moves workers away from neighbourhoods with a large supply of locally consumed services to neighbourhoods where the supply of these services is relatively scarce. We discuss the implications for aggregate employment and local economic recovery following the Covid-19 health crisis.

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  • De Fraja, Gianni & Matheson, Jesse & Rockey, James, 2021. "Zoomshock: The geography and local labour market consequences of working from home," CEPR Discussion Papers 15655, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:15655
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    Cited by:

    1. Jose Maria Barrero & Nicholas Bloom & Steven J. Davis, 2020. "Why Working From Home Will Stick," Working Papers 2020-174, Becker Friedman Institute for Research In Economics.
    2. Gupta, Arpit & Mittal, Vrinda & Peeters, Jonas & Van Nieuwerburgh, Stijn, 2022. "Flattening the curve: Pandemic-Induced revaluation of urban real estate," Journal of Financial Economics, Elsevier, vol. 146(2), pages 594-636.
    3. Althoff, Lukas & Eckert, Fabian & Ganapati, Sharat & Walsh, Conor, 2022. "The Geography of Remote Work," Regional Science and Urban Economics, Elsevier, vol. 93(C).
    4. Thisse, Jacques-François & Behrens, Kristian & Kichko, Sergey, 2021. "Working from home: Too much of a good thing?," CEPR Discussion Papers 15669, C.E.P.R. Discussion Papers.
    5. Parkhomenko, Andrii & Delventhal, Matthew J, 2023. "Spatial Implications of Telecommuting in the United States," Institute of Transportation Studies, Working Paper Series qt97q6c2rg, Institute of Transportation Studies, UC Davis.
    6. Bergeaud, Antonin & Eyméoud, Jean-Benoît & Garcia, Thomas & Henricot, Dorian, 2023. "Working from home and corporate real estate," Regional Science and Urban Economics, Elsevier, vol. 99(C).
    7. Antonin Bergeaud & Jean-Benoît Eymeoud & Thomas Garcia & Dorian Henricot, 2022. "Working From Home and Corporate Real Estate," Post-Print hal-03548889, HAL.
    8. Jesse Matheson & Brendon McConnell & James Rockey & Argyris Sakalis, 2023. "Do Remote Workers Deter Neighborhood Crime? Evidence from the Rise of Working from Home," Discussion Papers 23-07, Department of Economics, University of Birmingham.
    9. Steven Bond-Smith & Philip McCann, 2022. "The work-from-home revolution and the performance of cities," Working Papers 2022-6, University of Hawaii Economic Research Organization, University of Hawaii at Manoa.
    10. Stefanie Stantcheva, 2022. "Inequalities in the Times of a Pandemic," NBER Working Papers 29657, National Bureau of Economic Research, Inc.
    11. Gilles Duranton & Jessie Handbury, 2023. "COVID and Cities, Thus Far," Economic Policy Review, Federal Reserve Bank of New York, vol. 29(2), pages 6-52, October.
    12. Bárcena-Martín, Elena & Molina, Julián & Muñoz-Fernández, Ana & Pérez-Moreno, Salvador, 2022. "Vulnerability and COVID-19 infection rates: A changing relationship during the first year of the pandemic," Economics & Human Biology, Elsevier, vol. 47(C).
    13. Richard Goulding & Adam Leaver & Jonathan Silver, 2023. "From homes to assets: Transcalar territorial networks and the financialization of build to rent in Greater Manchester," Environment and Planning A, , vol. 55(4), pages 828-849, June.
    14. Karen Chapple & Laura Schmahmann, 2023. "Can we “Claim†the Workforce? A Labor-Focused Agenda for Economic Development in the Face of an Uncertain Future," Economic Development Quarterly, , vol. 37(1), pages 14-19, February.
    15. Antonin Bergeaud & Jean Benoit Eymeoud & Thomas Garcia & Dorian Henricot, 2022. "Working from home and corporate real estate," CEP Discussion Papers dp1831, Centre for Economic Performance, LSE.
    16. Bruno P. Carvalho & Susana Peralta & João Pereira dos Santos, 2022. "Regional and sectorial impacts of the Covid‐19 crisis: Evidence from electronic payments," Journal of Regional Science, Wiley Blackwell, vol. 62(3), pages 757-798, June.
    17. Crescenzi, Riccardo & Giua, Mara & Rigo, Davide, 2022. "How many jobs can be done at home? Not as many as you think!," LSE Research Online Documents on Economics 117523, London School of Economics and Political Science, LSE Library.
    18. Paula Holland, 2021. "Will Disabled Workers Be Winners or Losers in the Post-COVID-19 Labour Market?," Disabilities, MDPI, vol. 1(3), pages 1-13, July.
    19. Gokan,Toshitaka & Kichko,Sergei & Matheson,Jesse A & Thisse,Jacques-François, 2022. "How the rise of teleworking will reshape labor markets and cities?," IDE Discussion Papers 868, Institute of Developing Economies, Japan External Trade Organization(JETRO).

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    More about this item

    Keywords

    Covid-19; Lockdown; Work-from-home; Local labour markets; Teleworking;
    All these keywords.

    JEL classification:

    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management

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