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A New Equilibrium: COVID-19 Lockdowns and WFH Persistence

Author

Listed:
  • Ketter, Laura

    (University of Queensland)

  • Morris, Todd

    (University of Queensland)

  • Yu, Lizi

    (University of Queensland)

Abstract

This paper documents a robust link between COVID-19 lockdowns and the uptake and persistence of working from home (WFH) practices. Exploiting rich longitudinal data, we use a difference-in-differences strategy to compare office workers in three heavily locked-down Australian states to similar workers in less affected states. Locked-down workers sustain 43% higher WFH levels through 2023 — 0.5 days per week — with a monotonic dose–response relationship. Persistence is driven by adjustments on both sides of the labor market: employers downsize office space and open remote/hybrid positions, while employees relocate away from city centers and invest in home offices and technology.

Suggested Citation

  • Ketter, Laura & Morris, Todd & Yu, Lizi, 2025. "A New Equilibrium: COVID-19 Lockdowns and WFH Persistence," IZA Discussion Papers 17975, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp17975
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    File URL: https://docs.iza.org/dp17975.pdf
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    More about this item

    Keywords

    COVID-19; persistence; WFH; work from home; lockdowns; habit formation;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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