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COVID and Cities

Paper Session

Friday, Jan. 7, 2022 3:45 PM - 5:45 PM (EST)

Hosted By: American Real Estate and Urban Economics Association
  • Chair: Edward Glaeser, Harvard University

'Working' Remotely? Selection, Treatment, and Market Provision of Remote Work

Emma Harrington
,
University of Iowa and Princeton University
Natalia Emanuel
,
Harvard University

Abstract

Why was remote work so rare prior to Covid-19's lockdown? One possibility is that working remotely reduces productivity. Another is that remote work attracts unobservably less productive workers. In our setting of call-center workers at a Fortune 500 retailer, two natural experiments reveal positive productivity effects of remote work. These two natural experiments also reveal negative selection into remote work. While all workers were remote due to Covid-19, those who were hired into remote jobs were 12% less productive than those hired into on-site jobs. Extending remote opportunities to on-site workers similarly attracted less productive workers to on-site jobs. Our model allows us to characterize the counterfactual in which remote workers were not adversely selected. Without adverse selection, the retailer would have hired 57% more remote workers and worker surplus from remote work would have been 32% greater. Given the central role of selection, Covid-19's effect on remote work will persist if the lockdown disproportionately causes more productive workers to be willing to work remotely.

The Impact of the Coronavirus Pandemic on New York City Real Estate: First Evidence

Jackson P. Lautier
,
University of Connecticut
Jeffrey P. Cohen
,
University of Connecticut
Felix L. Friedt
,
Macalester College

Abstract

Concerns about the lingering novel Coronavirus may have led to long-term structural change in desired dwelling locations in some large U.S. cities, such as New York City. Densely concentrated neighborhoods may be at higher risk of virus contagion, giving more individuals incentives to move out. We investigate whether this pandemic-induced disamenity adversely affected real estate prices of one- or two-family owner-occupied properties across New York City. First, OLS hedonic results indicate that greater COVID case numbers are concentrated in neighborhoods with lower-valued properties. Second, we use a repeat-sales approach for the period 2003 to 2020, and we find that both the fear of contagion and pandemic-induced income effects adversely impacted home sale prices. Estimates suggest sale prices fell by roughly $60,000 or around 8% in response to both of the following: 1,000 additional infections per 100,000 residents; and a 10-percentage point increase in unemployment in a given MODZCTA. These price effects were more pronounced during the second wave of infections. Based on cumulative MODZCTA infection rates through 2020, the estimated COVID-19 price discount ranged from approximately 1% to 50% in the most affected neighborhoods, and averaged 14%. Interestingly, the fear of contagion effect intensified in the more affluent, but less densely populated NYC neighborhoods, while the income effect was more pronounced in the most densely populated neighborhoods with more rental properties and greater population shares of foreign-born residents. This disparity implies the pandemic led to inequality between homeowners in lower-priced and higher-priced neighborhoods.

Direct and Spillover Effects from Staggered Adoption of Health Policies: Evidence from COVID-19 Stay at Home Orders

Luis Quintero
,
Johns Hopkins University
Vadim Elenev
,
Johns Hopkins University
Alessandro Rebucci
,
Johns Hopkins University
Emilia Simeonova
,
Johns Hopkins University

Abstract

Little is known about the impact of public health regulations across borders. We estimate the direct and spillover effects of Stay-at-Home- Orders (SHO) on mobility to contain the spread of COVID-19 at the U.S. county level. Adopting counties should experience a decline in mobility due to the direct effect, while neighbors may experience a spillover. We propose a modified difference-in-difference contiguous-county triplets regression design, comparing both a county that adopted the SHO and its neighbor that did not to a neighbor's neighbor (\hinterland"") county. We find that mobility in neighboring counties declined by a third to a half as much as in the directly treated county. These spillovers are concentrated in triplets sharing the same media sources. Using mobility data, we decompose the neighboring counties' decline in mobility into a reduction in external visits from the treated county and a comparably larger voluntary reduction in the neighboring county's own traffic. Together, our results suggest that SHOs operate through information-sharing and illustrate the quantitative importance of voluntary social distancing. The finding that spillovers are positive casts doubt on the argument that a nationally coordinated policy response would have accomplished a greater reduction in mobility and contacts.

The Geography of Remote Work

Lukas Althoff
,
Princeton University
Fabian Eckert
,
University of California-San Diego
Sharat Ganapati
,
Georgetown University
Conor Walsh
,
Columbia University

Abstract

We show that cities with higher population density specialize in high-skill service jobs that can be done remotely. The urban and industry bias of remote work potential shaped the COVID-19 pandemic’s economic impact. Many high skill service workers started to work remotely, withdrawing spending from big-city consumer service industries dependent on their demand. As a result, low-skill service workers in big cities bore most of the recent pandemic’s economic impact. Our findings have broader implications for the distributional consequences of the U.S. economy’s transition to more remote work.

Discussant(s)
Alexander Wickman Bartik
,
University of Illinois-Chicago
Sophie Calder-Wang
,
University of Pennsylvania
Engy Ziedan
,
Tulane University
Daniel Tannenbaum
,
University of Nebraska-Lincoln
JEL Classifications
  • R3 - Real Estate Markets, Spatial Production Analysis, and Firm Location