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Working from home, wages, and regional inequality in the light of COVID-19

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Abstract

We use the most recent wave of the German Qualifications and Career Survey and reveal a substantial wage premium in a Mincer regression for workers performing their job from home. The premium persists within narrowly defined jobs and after controlling for workplace activities and accounts to more then 10%. In a next step, we provide evidence on substantial regional variation in the share of jobs that can be done from home across NUTS2 districts in Germany. Our results suggest that the COVID-19 crisis might affect already poorer regions more heavily as a lower share of workers can work from home there. Hence, looking at regional disparities in terms of different types of occupations is central for policy makers in choosing the right economic policies to mitigate the consequences of the crisis.

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  • Michael Irlacher & Michael Koch, 2020. "Working from home, wages, and regional inequality in the light of COVID-19," Economics working papers 2020-08, Department of Economics, Johannes Kepler University Linz, Austria.
    • Handle: RePEc:jku:econwp:2020-08
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    1. Jieun Lee, 2022. "Moral Hazard on Productivity Among Work-From-Home Workers Amid the COVID-19 Pandemic," Papers 2209.05684, arXiv.org.
    2. Alexandru Bănică & Ionel Muntele, 2023. "Local and regional factors of spatial differentiation of the excess mortality related to the COVID-19 pandemic in Romania," Letters in Spatial and Resource Sciences, Springer, vol. 16(1), pages 1-21, December.
    3. Marouani, Mohamed Ali & Minh, Phuong Le, 2020. "The first victims of Covid-19 in developing countries? The most vulnerable workers to the lockdown of the Tunisian economy," GLO Discussion Paper Series 581, Global Labor Organization (GLO).
    4. Juan Cruz Varvello & Jorge Camusso & Ana Inés Navarro, 2022. "Teletrabajo y distribución de ingresos laborales en Argentina," Asociación Argentina de Economía Política: Working Papers 4605, Asociación Argentina de Economía Política.
    5. Wu, Hongyue & Chang, Yuan & Chen, Yunfeng, 2024. "Greenhouse gas emissions under work from home vs. office: An activity-based individual-level accounting model," Applied Energy, Elsevier, vol. 353(PB).
    6. Palomino, Juan C. & Rodríguez, Juan G. & Sebastian, Raquel, 2020. "Wage inequality and poverty effects of lockdown and social distancing in Europe," European Economic Review, Elsevier, vol. 129(C).
    7. Jan Fransen & Daniela Ochoa Peralta & Francesca Vanelli & Jurian Edelenbos & Beatriz Calzada Olvera, 2022. "The emergence of Urban Community Resilience Initiatives During the COVID-19 Pandemic: An International Exploratory Study," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(1), pages 432-454, February.
    8. Stefanie Stantcheva, 2022. "Inequalities in the times of a pandemic," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 37(109), pages 5-41.
    9. Magnus Moglia & Stephen Glackin & John L. Hopkins, 2022. "The Working-from-Home Natural Experiment in Sydney, Australia: A Theory of Planned Behaviour Perspective," Sustainability, MDPI, vol. 14(21), pages 1-21, October.
    10. Diego Rodríguez Rodríguez, 2020. "Teletrabajo, acceso a Internet y apoyo a la digitalización en el contexto del Covid-19," Fedea Economy Notes 2020-08, FEDEA.
    11. Pouliakas, Konstantinos, 2020. "Working at Home in Greece: Unexplored Potential at Times of Social Distancing?," IZA Discussion Papers 13408, Institute of Labor Economics (IZA).
    12. Wei Wan & Jue Wang & Weimin Jiang, 2023. "Does COVID-19 Exacerbate Regional Income Inequality? Evidence from 20 Provinces of China," Sustainability, MDPI, vol. 15(15), pages 1-16, August.
    13. Vogtenhuber, Stefan & Steiber, Nadia & Mühlböck, Monika, 2023. "Got used to make less: the lasting earnings losses of COVID-19 short-time work," SocArXiv p2qvh, Center for Open Science.
    14. Kosteas, Vasilios D. & Renna, Francesco & Scicchitano, Sergio, 2022. "Covid-19 and Working from Home: toward a "new normal"?," GLO Discussion Paper Series 1013, Global Labor Organization (GLO).
    15. Astorquiza-Bustos, Bilver Adrian & Quintero-Peña, Jose Wilmar, 2023. "Who can work from home? A remote working index for an emerging economy," Telecommunications Policy, Elsevier, vol. 47(10).
    16. Diana Bílková & Vlastimil Beran & Filip Červenka, . "Distribuce platů a procentní podíly nízkopříjmových zaměstnanců ve veřejném sektoru se zaměřením na první rok pandemie covid-19 [Salary Distribution and Percentages of Low-salary Workers in the Pub," Politická ekonomie, Prague University of Economics and Business, vol. 0.
    17. 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).
    18. Cho, Seung Jin & Lee, Jun Yeong & Winters, John V., 2020. "COVID-19 Employment Status Impacts on Food Sector Workers," ISU General Staff Papers 202006080700001107, Iowa State University, Department of Economics.
    19. Wang, Ding & Tayarani, Mohammad & Yueshuai He, Brian & Gao, Jingqin & Chow, Joseph Y.J. & Oliver Gao, H. & Ozbay, Kaan, 2021. "Mobility in post-pandemic economic reopening under social distancing guidelines: Congestion, emissions, and contact exposure in public transit," Transportation Research Part A: Policy and Practice, Elsevier, vol. 153(C), pages 151-170.
    20. Svenn-Erik Mamelund & Jessica Dimka & Nan Zou Bakkeli, 2021. "Social Disparities in Adopting Non-pharmaceutical Interventions During COVID-19 in Norway," Journal of Developing Societies, , vol. 37(3), pages 302-328, September.
    21. Egana-delSol, Pablo & Micco, Alejandro, 2024. "The Role of Technological Change in the Evolution of the Employment to Output Elasticity," IZA Discussion Papers 17003, Institute of Labor Economics (IZA).
    22. Ben Yahmed, Sarra & Berlingieri, Francesco & Brüll, Eduard, 2022. "Adjustments of local labour markets to the COVID-19 crisis: The role of digitalisation and working-from-home," ZEW Discussion Papers 22-031, ZEW - Leibniz Centre for European Economic Research.
    23. Fadinger, Harald & Schymik, Jan & Alipour, Jean-Victor, 2020. "My Home Is My Castle -- The Benefits of Working from Home During a Pandemic Crisis: Evidence from Germany," CEPR Discussion Papers 14871, C.E.P.R. Discussion Papers.
    24. Diana Bílková & Vlastimil Beran & Filip Červenka, 2023. "Distribuce platů a procentní podíly nízkopříjmových zaměstnanců ve veřejném sektoru se zaměřením na první rok pandemie covid-19," Politická ekonomie, Prague University of Economics and Business, vol. 2023(5), pages 555-590.

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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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