Remote Work and City Structure

Relative to remote work, working downtown facilitates valuable interactions with other in-office workers but entails commuting costs. The resulting coordination mechanism can lead to multiple stationary equilibria with varying levels of remote work. Temporary reductions in commuters, as in the COVID-19 pandemic, can lead to persistently large fractions of remote workers. Cell phone-based mobility data for the United States shows commuting trips in the largest cities, which are more likely to exhibit multiplicity, have stabilized at only 60 percent of prepandemic levels, while they are fully back in smaller cities. Cities with permanently low commuting experience average welfare losses of 2.3 percent.