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  5. Remote Work and City Structure

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Remote Work and City Structure

  • Ferdinando Monte
  • Charly Porcher
  • Esteban Rossi-Hansberg
American Economic Review (Forthcoming)

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 then lead to persistently large fractions of remote workers. Cellphone- based mobility data for the U.S. shows that commuting trips in the largest cities, which are more likely to exhibit multiplicity, have stabilized at only 60% of pre-pandemic levels, while they are fully back in smaller cities. Cities with permanently low commuting experience average welfare losses of 2.3%.

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