The Review of Economic Studies· 2026Q1
Spatial Implications of Telecommuting
- 82citations
- Q1SCImago
- 2026year
Short summary
A quantitative spatial model shows that increased telecommuting leads to significant reallocations of residents and jobs within and across cities, benefiting telecommuters while harming non-telecommuters, and partially reversing the "Great Divergence" in talent concentration.
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Key points
- A quantitative spatial model simulates the impact of increased telecommuting on job and resident distribution across 4,502 U.S. locations.
- Telecommuting adoption results in non-monotonic reallocations of residents and jobs within and across cities.
- Telecommuters experience welfare gains, while non-telecommuters suffer welfare losses.
- Increased telework access reduces wage inequality and partially reverses the "Great Divergence" in talent and spending power concentration.
AI-generated from the title and abstract; the full text is not read.
Abstract
<span>We build a quantitative spatial model in which some workers can substitute on-site&nbsp;effort with work done from home. Ability and propensity to telecommute vary by&nbsp;</span><span>education and industry. We quantify our framework to match the distribution of jobs&nbsp;and residents across 4,502 U.S. locations. Then we simulate permanent increases in&nbsp;</span><span>the attractiveness and productivity of telework that lead to greater adoption of hybrid&nbsp;and fully remote work. To validate our model, we show that our results are positively&nbsp;correlated with local changes in residents, jobs, and housing costs since 2019. The rise&nbsp;of telework results in a rich non-monotonic pattern of reallocations of residents and&nbsp;jobs within and across cities. Workers who can telecommute experience welfare gains,&nbsp;and those who cannot suffer losses. Broader access to jobs reduces wage inequality&nbsp;across residential locations, and heralds a partial reversal in the spatial concentration&nbsp;of talent and spending power known as the "Great Divergence."</span>
The authors' abstract, as published at the source. The Review of Economic Studies, 2026 · DOI ↗
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Field: Economics and Econometrics
Economics and EconometricsEconomics, Econometrics and Finance