Working from Home: Too Much of a Good Thing?

52 Pages Posted: 22 Sep 2021

See all articles by Kristian Behrens

Kristian Behrens

University of Quebec at Montreal (UQAM) - Department of Economics

Sergey Kichko

National Research University Higher School of Economics

Jacques-François Thisse

Catholic University of Louvain (UCL); Centre for Economic Policy Research (CEPR)

Multiple version iconThere are 2 versions of this paper

Date Written: January 1, 2021

Abstract

We develop a general equilibrium model to study how different intensities of telecommuting affect firms’ efficiency and the economy as a whole. We pay attention to the effects of working from home (WFH) that operate through changes in the production and consumption of buildings: more WFH reduces firms’ demands for office space, but increases workers’ demand for space at home. WFH is a mixed blessing: the relationship between telecommuting and GDP is ∩- shaped, and more WFH raises income inequality. Thus, an excessive downscaling of workspaces may be damaging to all. Firms and workers are shown to generally choose inefficiently large WFH shares.

Keywords: alternative work arrangements, housing, land, office, telecommuting, working from home

JEL Classification: J20, R13, R14

Suggested Citation

Behrens, Kristian and Kichko, Sergey and Thisse, Jacques-François, Working from Home: Too Much of a Good Thing? (January 1, 2021). Available at SSRN: https://ssrn.com/abstract=3928628

Kristian Behrens (Contact Author)

University of Quebec at Montreal (UQAM) - Department of Economics ( email )

P.O. Box 8888, Downtown Station
Montreal, Quebec H3C 3P8
Canada

Sergey Kichko

National Research University Higher School of Economics ( email )

Myasnitskaya street, 20
Moscow, Moscow 119017
Russia

Jacques-François Thisse

Catholic University of Louvain (UCL) ( email )

Place des Doyens 1
Louvain-la-Neuve, 1348
Belgium

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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