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

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  • Michael Irlacher
  • Michael Koch

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.

Suggested Citation

  • 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
    Note: English
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    References listed on IDEAS

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    1. Alexandra Spitz-Oener, 2006. "Technical Change, Job Tasks, and Rising Educational Demands: Looking outside the Wage Structure," Journal of Labor Economics, University of Chicago Press, vol. 24(2), pages 235-270, April.
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    Keywords

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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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