ZOOM, Uppsala
“Working from home and urban structure”
Abstract
How would the structure of cities change if working from home (WFH) persisted in the post-pandemic era? This paper investigates the impact of WFH in the demand for office and housing space in monocentric cities. We find that residential land rents fall close to the business center but may increase in the suburbs. The impact on average wage is ambiguous. WFH is shown to benefit workers-residents only in large enough cities. The paper also studies the optimal fraction of WFH from a residents and welfare point of view. Our results suggest that workers-residents have incentives to adopt an inefficiently high WFH scheme.