A fivefold increase in remote work since the pandemic could boost economic growth and bring wider benefits

From the article:

Working from home (WFH) increased about tenfold following the outbreak of the pandemic and has settled in at about five times its prepandemic level (see Chart 1).

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The easiest way to see labor’s impact is the survey evidence from across the United States, Europe, and Asia that shows hybrid work is worth about an 8 percent increase in salary. Hybrid work is the typical pattern for office workers, managers, and other professionals, involving usually two or three days a week away from the office. To understand why employees would consider this to be worth 8 percent of their salary, note that typical workers spend about 45 hours a week in the office, yet they spend close to another 8 hours a week commuting. So working from home three days a week saves them about five hours a week, about 10 percent of their total weekly work and commute time.

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This value of working from home has a powerful impact on labor supply. In the global economy there are tens of millions of people who are on the edge of the workforce. So small changes in the attractiveness of work can bring many millions of them into employment. This marginal labor force includes those with childcare or eldercare responsibilities, those close to retirement, and some folks in rural areas.

One example of this WFH impact on labor supply is the approximately 2 million more employees with a disability who are working in the US following the pandemic. These increases in disability employment have occurred primarily in high-WFH occupations. Employees with a disability benefit in two ways: first, by avoiding long commutes and second, by the ability to control their work environment at home.

Another example is prime-age female employment in the US, which has risen about 2 percent faster than prime-age male employment since the pandemic. Women’s larger role in childcare could be driving this rise in female labor force participation via WFH, according to recent research.

Collectively these effects could increase labor supply by several percent.

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If parents are able to work two or three days a week at home, particularly with flexible schedules that allow them to share parenting responsibilities, this could increase birth rates. Preliminary analysis based on US survey data suggests perhaps 0.3 to 0.5 more desired children per couple when both work from home one day or more a week.

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The beneficial impact of WFH on capital comes from the longer-term release of office space for other uses, like residential and retail. If employees are based at home two or three days a week, society needs less office space, and that space can be used for other activities. It also reduces commuting traffic, curbing the need for additional transportation infrastructure. More intensive use of our home capital—the space and equipment in our houses and apartments—can allow society to save on the use of transportation and office capital, which can be redeployed to other uses. In major city centers about half of the land is covered in office space, and given that office occupancy is now 50 percent below prepandemic levels, there is great potential for office space reduction.

On the other hand:

Executives and Research Disagree About Hybrid Work’s Value. Why? - New York Times - archive