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Remote Work, Firm Technology, and the Spatial Economy: Generations, Care, and the Normalized Quadratic Approach

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  • Chihiro Shimizu

Abstract

This paper develops a spatial model of remote work, firm technology, and intergenerational care within the Becker-Diewert household-production tradition. The firm's technology is modeled using the Normalized Quadratic cost function, which allows the office-remote labor substitution elasticity to vary with factor prices. Residential space is decomposed into living and home-office components. Childcare and eldercare have separate production functions with own time and market services as substitutes. A generational structure distinguishes children, workers, and the elderly; only workers commute. I derive shadow-price bounds extending Schreyer and Diewert (2014) to five service prices, a spatial full-income identity with care surpluses, and rent gradients that flatten with remote-work technology. Heterogeneous households sort by remote-work capacity and care needs. Population aging amplifies the value of remote work as a care-enabling technology and generates a rent rotation between residential and commercial real estate.

Suggested Citation

  • Chihiro Shimizu, 2026. "Remote Work, Firm Technology, and the Spatial Economy: Generations, Care, and the Normalized Quadratic Approach," Working Papers e225, Tokyo Center for Economic Research.
    • Handle: RePEc:tcr:wpaper:e225
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