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The polarisation of remote work

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  • Braesemann, Fabian
  • Stephany, Fabian
  • Teutloff, Ole
  • Kässi, Otto
  • Graham, Mark
  • Lehdonvirta, Vili

Abstract

The Covid-19 pandemic has led to the rise of remote work with consequences for the global division of work. Remote work could connect labour markets, but it could also increase spatial polarisation. However, our understanding of the geographies of remote work is limited. Specifically, does remote work bring jobs to rural areas or is it concentrating in large cities, and how do skill requirements affect competition for jobs and wages? We use data from a fully remote labour market - an online labour platform - to show that remote work is polarised along three dimensions. First, countries are globally divided: North American, European, and South Asian remote workers attract most jobs, while many Global South countries participate only marginally. Secondly, remote jobs are pulled to urban regions; rural areas fall behind. Thirdly, remote work is polarised along the skill axis: workers with in-demand skills attract profitable jobs, while others face intense competition and obtain low wages. The findings suggest that remote work is shaped by agglomerative forces, which are deepening the gap between urban and rural areas. To make remote work an effective tool for rural development, it needs to be embedded in local skill-building and labour market programmes.

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  • Braesemann, Fabian & Stephany, Fabian & Teutloff, Ole & Kässi, Otto & Graham, Mark & Lehdonvirta, Vili, 2021. "The polarisation of remote work," SocArXiv q8a96, Center for Open Science.
    • Handle: RePEc:osf:socarx:q8a96
    DOI: 10.31219/osf.io/q8a96
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    More about this item

    JEL classification:

    • F6 - International Economics - - Economic Impacts of Globalization
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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