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The New Geography of Labor Markets

Author

Listed:
  • Mert Akan
  • Jose Maria Barrero
  • Nicholas Bloom
  • Thomas Bowen
  • Shelby R. Buckman
  • Steven J. Davis
  • Hyoseul Kim

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

  • Mert Akan & Jose Maria Barrero & Nicholas Bloom & Thomas Bowen & Shelby R. Buckman & Steven J. Davis & Hyoseul Kim, 2025. "The New Geography of Labor Markets," NBER Working Papers 33582, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:33582
    Note: CF EFG IO LE LS PE PR
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    1. Barrero, Jose Maria & Bloom, Nick & Davis, Steven J., 2020. "Why Working From Home Will Stick," SocArXiv wfdbe, Center for Open Science.
    2. Bloom, Nicholas & Davis, Steven J. & Hansen, Stephen & Lambert, Peter John & Sadun, Raffaella & Taska, Bledi, 2023. "Remote work across jobs, companies and space," LSE Research Online Documents on Economics 121302, London School of Economics and Political Science, LSE Library.
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    Cited by:

    1. Laura Ketter & Todd Morris & Lizi Yu, 2025. "A new equilibrium: COVID-19 lockdowns and WFH persistence," Papers 2506.16671, arXiv.org.
    2. 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).
    3. 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:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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