Work from Home and Migration

We study how full-time work from home (WFH) affects migration and economic activity across cities. Using ACS and novel survey data, we show WFH workers migrate 40–50 percent more than comparable commuters, commuters who switch to WFH migrate more, plausibly exogenous WFH expansions raise migration and WFH workers migrate to lower-cost cities than commuters. The post-Covid expansion in WFH coincided with a large increase in migration; WFH accounts for half of this increase and much of the cross-city variation in migration changes. Recently, WFH has stabilized at twice its pre-Covid rate. We study the long-run implications of this shift in a dynamic spatial equilibrium model of remote work, costly migration and job search. Expanded WFH raises migration by shifting workers into more mobile remote jobs, reallocating people and tax revenue out of expensive cities and narrowing rent differentials. Welfare gains are sizable but concentrated among remote-capable workers in commuting jobs just before the shock, especially those in large cities. A higher WFH share also shifts more of the burden of local shocks onto commuters.