Study finds that working from home is here to stay

Last September, I wrote about a report from the Center For Rural Policy and Development, which found that:

In 2020 and 2021, the decades-long trend of population loss in rural counties and population gain in urban ones was disrupted by the pandemic in a noticeable way.

The newest population estimates reveal that rural Minnesota counties experienced a population increase from in-migration, while at the same time, the Twin Cities’ urban counties experienced enough out-migration to result in their first population decline in many years. Meanwhile, Greater Minnesota counties with higher percentages of non-white populations continued to see growth as well.

“Was this a one-off or will it continue?” I asked:

Will the populations of “rural” counties continue to grow more quickly than those of “urban” counties?

One thing which suggests that this might be a trend with some longevity is that remote working allows people who work where housing is relatively expensive to live somewhere where housing is relatively cheap without spending half their life stuck on a freeway.

I then mentioned a study by Fannie Mae, which found that:

At the beginning of this year, 22% of remote and hybrid workers said they would be willing to relocate to a different region or increase their commute, up from 14% in the third quarter of 2021. The research also found that among remote workers, all age and income groups have grown more willing to relocate or live farther away from their workplace since 2021. But younger workers — those between 18 and 34 — are significantly more willing than older workers to live or commute a further distance from their work, with the share willing to do so jumping from 18% in 2021 to 30% in 2023.

Its authors concluded:

We believe this greater willingness to live farther from the…workplace may be an indication that some workers are feeling more secure about their remote work situation…or their ability to find another job if their current employer were to change its policies.

As I summarized:

They may have good reason for this sense of security. The study found that remote and hybrid work may be here to stay, or, at least, stick with us long enough for people to buy or rent a new home because of it.

In the first part of 2023, 35% of respondents worked fully remote or worked a hybrid mix of some time at a workplace and some time at home, only slightly down from 36% in 2021. While the share of workers going to a work site or office every day was unchanged from 2021 to 2023 at 49%, the share of people working fully remote ticked up to 14% this year from 13% in 2021.

New research supports this. In a new paper titled “Work from Home before and after the COVID-19 Outbreak” economists Alexander Bick, Adam Blandin, and Karel Mertens:

…document a persistent rise in work from home (WFH) over the course of the COVID-19 pandemic. Using theory and direct survey evidence, we argue that three-quarters of this increase reflects the adoption of new work arrangements that will likely be permanent for many workers.

If this holds for Minnesota, it could have some far reaching consequences. It will lessen house price pressures in the Twin Cities by allowing people to access jobs there while living somewhere else. This, in turn, will make it even harder for downtown Minneapolis to “bounce back.” By making place less important, it will make businesses and workers more mobile. And, finally, it could lead to some surprising results come the next redistricting.