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Effects of remote work on productivity in COVID-19 era

Sabrina Wulff Pabilonia and Jill Janocha Redmond examine "The rise in remote work since the pandemic and its impact on productivity" in a new Beyond the Numbers article published in October 2024.

Key takeaways are:

  • Remote work rose in all 61 industries in the private business sector from 2019 to 2021, with four industries having over half of their workers working primarily from home.
  • During the COVID-19 pandemic, total factor productivity grew faster in industries that experienced larger increases in remote work.
  • Accounting for pre-pandemic trends slightly dampens the magnitude of the associations, but they are still positive and statistically significant.
  • Industries that had larger increases in the percentage of remote workers had slower growth in unit labor and nonlabor costs, especially unit capital costs.
  • Remote work allowed many businesses to downsize their office footprints.
  • Productivity gains following the surge in remote work from 2019 to 2022 did not lead to an increase in hourly compensation.