The Geography of Remote Work

High-income business service workers dominate the economies of major US cities, and their spending supports many local consumer service jobs. As a result, business services' high remote work potential poses a risk to consumer service workers who could lose an essential source of revenue if business service workers left big cities to work from elsewhere. We use the COVID-19-induced increase in remote work to provide empirical evidence for this mechanism and its role in shaping the pandemic's economic impact. Our findings have broader implications for the distributional consequences of the transition to more remote work.

Automated summary

High-income business service workers play a dominant role in the economies of major US cities, and their potential shift to remote work poses a risk to consumer service workers who rely on their spending. By examining the increase in remote work during the COVID-19 pandemic, we provide empirical evidence for this mechanism and its impact on the economy. Our findings have broader implications for the distributional consequences of transitioning to more remote work.