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The Impact of Remote Work on Local Employment, Business Relocation, and Local Home Costs

Michael Dalton, Matthew Dey, and Mark Loewenstein

Abstract

This paper brings together five different datasets to further analyze the effects of the increase in tele-working that occurred during the pandemic: the Business Response Survey (a new BLS Survey of establishments), the Occupational Employment and Wage Statistics (OEWS), the Quarterly Census of Employment and Wages (QCEW), the American Community Survey (ACS), and Zillow. Combining the BRS, the OEWS, and the QCEW, we impute teleworking take-up rates for the universe of business establishments in the U.S, for the period immediately preceding the pandemic and for the summer of 2021. We predict a firm’s decision to relocate or downsize based on whether teleworking by its employees has increased. Increased teleworking results in a reduction in local foot traffic when the number of workers who stop commuting out of the area is smaller than the number workers who no longer commute into an area. Combining information in the ACS about residence with our teleworking estimates for the universe of establishments, we estimate the change in net traffic inflow for every zipcode. Armed with these estimates and the QCEW, we then estimate the consequent effects on local employment in the various industries. The negative impact of a reduction in Census track foot traffic was especially strong for employment in accommodation and food services We conclude our analysis by bringing in Zillow data to analyze the effect that the changes brought on by increased working at home has on local rents and homeprices. The key explanatory variables in the estimated equations for rents and home prices are predictions by zipcode for firm relocations, firm downsizing, and the change in net foot traffic inflow.