American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Remote Work and City Structure
American Economic Review
(pp. 3152–96)
Abstract
Relative to remote work, working downtown facilitates valuable interactions with other in-office workers but entails commuting costs. The resulting coordination mechanism can lead to multiple stationary equilibria with varying levels of remote work. Temporary reductions in commuters, as in the COVID-19 pandemic, can lead to persistently large fractions of remote workers. Cell phone-based mobility data for the United States shows commuting trips in the largest cities, which are more likely to exhibit multiplicity, have stabilized at only 60 percent of prepandemic levels, while they are fully back in smaller cities. Cities with permanently low commuting experience average welfare losses of 2.3 percent.Citation
Monte, Ferdinando, Charly Porcher, and Esteban Rossi-Hansberg. 2026. "Remote Work and City Structure." American Economic Review 116 (8): 3152–96. DOI: 10.1257/aer.20231414Additional Materials
JEL Classification
- I12 Health Behavior
- J22 Time Allocation and Labor Supply
- M54 Personnel Economics: Labor Management
- R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics
- R31 Housing Supply and Markets