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The New Geography of Labor Markets

Author

Listed:
  • Akan, Mert

    (Stanford University)

  • Barrero, José María

    (Instituto Tecnológico Autónomo de México Business School)

  • Bloom, Nicholas

    (Stanford University)

  • Bowen, Tom

  • Buckman, Shelby Rae

    (Stanford University)

  • Davis, Steven J.

    (Hoover Institution)

  • Kim, Hyoseul

    (Stanford University)

Abstract

We study where Americans live in relation to their employer’s worksite using matched employer-employee data, and how that relationship changes with the rise of work from home (WFH). Mean distance from home to employer’s worksite rose more than 70% between 2019 and 2024 in our dataset. Twelve percent of employees hired after March 2020 reside fifty or more miles from their employer by 2024, triple the pre-pandemic share. Distance to employer rose most for those in their 30s and 40s, among highly paid employees, and in Finance, Information, and Professional Services. Especially for the affluent, the pandemic-instigated rise in WFH initiated a multi-year pattern of net migration to areas with cheaper housing and states with lower tax rates. Finally, we show that distant employees exhibit more sensitivity to firm-level adjustments on hiring and separation margins. These developments have implications for residential location, state-level tax revenues, labor markets, and household welfare.

Suggested Citation

  • Akan, Mert & Barrero, José María & Bloom, Nicholas & Bowen, Tom & Buckman, Shelby Rae & Davis, Steven J. & Kim, Hyoseul, 2025. "The New Geography of Labor Markets," IZA Discussion Papers 18278, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp18278
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    References listed on IDEAS

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    2. Laura Ketter & Todd Morris & Lizi Yu, 2025. "A new equilibrium: COVID-19 lockdowns and WFH persistence," Papers 2506.16671, arXiv.org.
    3. 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).
    4. Jan K. Brueckner & David R. Agrawal, 2025. "Work-from-Home and Wage Convergence Across Cities: An Exploration," CESifo Working Paper Series 12150, CESifo.

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    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics

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