What has covid-19 taught us about remote work?

1. Pre-covid studies of remote work have held up

Prior to covid-19, there were a handful of economic studies on remote work. These studies’ conclusions have held up quite well.

2. Pre-covid beliefs about remote work were wrong but hard to correct

That said, if remote work is so productive, it is something of a puzzle why it was so rarely used prior to covid-19. Research on the covid-19 pivot to remote work provides some answers. Most importantly, perceptions about the efficacy of remote work were way off. Ozimek (2020) reports on an April survey of hiring managers that finds many more were underestimating the potential or remote work than were overestimating it.

3. Concerns about social interaction and serendipity remain

While productivity has been, on average, unchanged or even improved by the shift to remote work, there are some signs that maintaining productivity and innovation in the long run faces additional challenges. One of the critiques of fully remote work has always been that it deprives workers of the social environment of the office which allows for clearer communication, the growth and maintenance of social networks, and serendipity.

4. Remote work will improve over time

At the same time, we also have plenty of indications that remote work will improve. The fact that remote work appears to be likely to persist (see next section) has created a large market opportunity for improved remote work technology. Bloom, Davis, and Zhestkova (2021) document that the share of US patent applications that include words associated with remote work expanded dramatically at the beginning of 2020, as the scope of the covid-19 crisis became clear.

5. Remote work will be more common after covid-19 subsides

When the covid-19 pandemic eventually subsides, it appears quite likely that remote work will become significantly more common. In an April survey of 1,500 hiring managers in Ozimek (2020), 62% of respondents planned to make their workforce more remote than before, as a result of covid-19, with 26% planning to make their workforce significantly more remote. A May 2020 survey of 1700 small business leaders found 41% of respondents planned to let more than 40% of their remote workers stay remote when covid-19 ends; 17% of small business leaders plan to let nearly all their remote workers stay remote.

6. The new equilibrium will have winners and losers, but will probably raise overall welfare

If remote work is here to stay, is that a good thing? With this major transition underway, it’s too early for the data to say. To think through the possible ramifications, we have to turn to models.

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