Cool New Work on Remote Work

Quick Overview

New research by Nicholas Bloom and collaborators, discussed by Steven Davis, reveals that remote work has led to significant, quantifiable productivity gains, with workers valuing the flexibility enough to accept a 2-3% wage cut, and furthermore, the shift has unexpectedly boosted parental engagement in their children's education, particularly for less-educated parents, while also causing a divergence in city vs. suburban retail spending patterns.

Key Points: Remote work has led to productivity gains, with workers willing to accept a 2-3% wage cut for the flexibility, according to research discussed. The studies show that highly skilled workers in high-paying jobs value the opportunity to work from home the most. A key finding is that remote work positively impacts parental engagement in education, especially for parents without college degrees, who show a marked increase in helping children with schoolwork. The research suggests that employers often underestimate how much workers value remote work flexibility, leading to a mismatch in perceived value. Data indicates a significant shift in consumer spending patterns: more money is spent on goods like groceries (up 1%) and less on services like health and beauty, as people spend less time commuting and shopping near city centers. Economists are finding that the productivity improvements observed (around 10% in some studies) are not temporary, suggesting a structural change in work arrangements. The study on Turkish call centers showed a 12% productivity increase for fully remote workers compared to those who commuted five days a week.

Context: Steven Davis, Senior Fellow at the Hoover Institution, hosts an episode of "Economics Applied" featuring Nicholas Bloom, a Stanford University Professor of Economics and prolific researcher on remote work trends. The conversation centers on recent, "cool new work" research, particularly focusing on the productivity effects, worker preferences, and broader societal consequences stemming from the accelerated shift to remote and hybrid work models following the 2020 pandemic lockdowns.