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Beyond BLS

April 2021

To work from home or not to work from home? That is the question

Maya B. Brandon

The coronavirus disease 2019 (COVID-19) era has ushered in a new look and feel for the workplace. With the fear of infection, of self or loved ones, many people are breathing a sigh of relief with the expansion of permissions to work from home, whereas others are holding their breath in the aftermath of widespread lockdowns and economic uncertainty. In “Who should work from home during a pandemic? The wage-infection trade-off” (National Bureau of Economic Research, Working Paper 27908, October 2020), authors Sangmin Aum, Sang Yoon (Tim) Lee, and Yongseok Shin explore an optimal policy: “the economic costs of containing a pandemic can be minimized by only sending home those jobs that are highly exposed but easy to perform from home.”

How we think about interacting with others, avoiding illness, and establishing a new normal are top subjects today. In many cases, people must weigh the risks of exposure and infection against the benefits of wages. We assume that with these widespread health disparities, the workplace is a breeding ground of infection and shutting it down will reduce infection. Actions to contain pandemic-level contagions often require the cooperation of people at multiple levels, but these actions come at a cost, especially to low-wage workers who are “bearing the brunt of the pandemic economically and in terms of infection risks.” Businesses and workers have difficult choices to make, and these choices come with a laundry list of economic, social, and health tradeoffs.

Many workers are safely able to work from home during the pandemic, but many are not. Aum, Lee, and Shin have constructed two indexes—one of occupational exposure risk and another of time spent working from home. Their indexes use data from O*NET (the Occupational Information Network that is the primary source of occupational information for the United States), the American Time Use Survey, and the American Community Survey to find that jobs with workers who have less ability to work from home and higher exposure to infection are not tightly correlated. “Infection risks vary widely even among jobs with the same WFH [working from home]: for example, neither medical therapists nor experimental physicists can work from home, but the latter pose almost no risk of contagion.” The authors argue that the ability to work from home is not the be-all and end-all for who should work from home, because the nature of the work and possibility of exposure should also be considered. Jobs have been classified as essential or nonessential. These classifications, however, are too broad because the scope of work and the exposure risk better indicate who should be allowed to work from home on the basis of need. The authors report that closing and locking down all businesses are more harmful economically at micro- and macrolevels than operating under the optimal policy of sending home workers who have jobs that are highly exposed but easy to perform from home.

In the face of widespread business closures, high levels of exposure to the COVID-19, and uncertainty of employment, low-wage workers have been greatly affected globally by the lockdowns. High-wage workers have been less affected by the lockdowns and continued to work with modifications and increased options to telework. Aum, Lee, and Shin’s optimal policy provides a realistic view of the job world during the COVID-19 pandemic but uses a conceptual view of the real world. Their goal is to provide a blueprint for pandemic lockdowns that is simple, implementable, and optimal for workers, employers, and the overall economy.

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