Ep71 “The Working From Home Revolution” with Nick Bloom

Quick Overview

Stanford Professor Nick Bloom argues that the working-from-home revolution, accelerated by COVID-19, is permanent, with roughly 30% of the U.S. workforce remaining hybrid or fully remote, leading to significant shifts like reduced office property values and increased productivity for certain job types, though concerns about social connection and mentoring remain.

Key Points: The shift to working from home (WFH) is permanent, with roughly 30% of the U.S. workforce now working hybrid or fully remote. Pre-COVID, WFH levels were very low (around 5-8%); the pandemic acted as a massive shock, moving the economy to a new equilibrium. Bloom's research suggests that hybrid work (e.g., 2-3 days WFH) often leads to productivity increases (around 10%) compared to fully remote or in-office work, especially for knowledge workers. The major cost of WFH is reduced social interaction, learning, and mentorship, which is particularly critical for junior employees or those in fields like teaching. The commercial office property market has been negatively affected, while suburban housing markets have seen gains as workers move away from city centers. Companies are developing new policies, often mandating 2-3 days in the office, because they perceive in-person work as crucial for team cohesion and training, despite productivity gains in some WFH roles. Data from companies like Microsoft and Yelp show that while productivity for certain tasks remains stable or increases remotely, softer skills like mentorship suffer without in-person interaction.

Context: This interview features Nick Bloom, the William Eberle Professor of Economics at Stanford University, discussing his extensive research on the long-term impacts of the Working From Home Revolution that began during the COVID-19 pandemic. Hosted by Julian Binsbergen from the Lauder Institute at Wharton, the discussion centers on whether the massive shift to remote work is temporary or a lasting structural change in workplace dynamics, examining productivity, real estate markets, and social capital.