publications | Business Conditions, COVID-19, Economy, Remote work

Chart of the week: How will the region’s geography of work change if remote work continues?

April 21, 2022
  • Bailey McConnell
  • Yesim Sayin
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Using data from researchers at the Becker-Freidman Institute for Economics at the University of Chicago that estimates the share of jobs that can be done from home by industry paired with data on pre-pandemic commuting patterns, we mapped where workers in remote eligible jobs lived and worked prior to the pandemic. The results show that if workers continue to work from home, economic activity is likely to shift from downtown D.C. to D.C.’s mixed-use and university-based neighborhoods. It is hard to predict exactly how the economic activity in the region would shift if remote work continues, but past data offers the city some foresight into 1) how demand for the city’s space might change, and 2) how to maximize future revenue under changing conditions. In an upcoming brief, we will use pre-pandemic data to estimate how shifting worker preferences may impact the city’s tax base.

Remote work is likely here to stay and is breaking the relationship between where we live and where we work. This has implications on the District’s attractiveness, competitiveness, economic growth, and fiscal health. As workers spend less time near their workplaces and more time near their homes, it shifts the geography of work in the region, and thus, economic activity. It is hard to predict exactly how the economic activity in the region will shift as there are still a lot of unknowns:

  • How many workers will shift to a permanent or hybrid work arrangement?
  • To what extent will remote work alter where workers prefer to live?
  • What will be the long-run equilibrium?

Despite these unknowns, we can use pre-pandemic data to begin to estimate how a shift to telework will impact the region’s geography of work. First, we know that the transition to remote work will most quickly impact those that can do their jobs from home, such as those in office-based industries. While many service jobs support office workers, there will likely be a delay in the market’s response to new long-term worker behavior, so for now we focus on the geography of the region’s jobs that can be done from home.

Researchers at the Becker-Freidman Institute for Economics at the University of Chicago estimate that 51 percent of all jobs in the D.C. metropolitan area can be done at home. This compares to a national average of 37 percent. This is in part driven by the region’s high share of workers with a bachelor’s degree or higher and makes the D.C. metropolitan area particularly vulnerable to the impacts the pandemic has had on commuting patterns, and thus, the economic loss that comes from a decline in daytime population.

If remote work continues, the geography of work in the region might shift from where workers in remote eligible jobs work to where workers in remote eligible jobs live. Within the D.C. metropolitan area, this would shift workers away from the region’s transportation lines and downtown D.C. to more residentially dense neighborhoods.

Focusing on the impacts within D.C. shows a potential shift in economic activity from downtown to the city’s mixed-use and university-based neighborhoods, such as Navy Yard and NoMa. This would disproportionately impact D.C.’s businesses and could alter where workers prefer to live.

Within the region, D.C.’s economy is particularly at risk if remote work takes hold. Of the workers that can do their job from home within the D.C. metropolitan area’s core counties, 27 percent work in D.C. and only 15 percent live in D.C. Only Fairfax County has more workers that can easily do their jobs from home, but among the area’s core counties, D.C. has the greatest number of commuters to lose.

While the city does not have the power to change worker preferences, understanding the impact of remote work will allow the city to 1) adapt to how demand for the city’s space is changing and 2) maximize future revenue under changing conditions. In an upcoming brief, we look at the impact of remote work more closely, estimating what it means for the District’s general sales tax, commercial property, and income tax bases.  

Sources

  • Dingel, Jonathan, and Brent Neiman (2020). “How Many Jobs Can Be Done at Home?” Becker-Freidman Institute for Economics at the University of Chicago, Research/White Paper. Data on the share of jobs that can be done from home by industry can be accessed here: https://github.com/jdingel/DingelNeiman-workathome/
  • U.S. Census Bureau LEHD Origin-Destination Employment Statistics Data (2019), accessed on March 10, 2022 at https://lehd.ces.census.gov/data/#lodes. LODES 7.5 [version].

Data notes

  • Jobs in education services are excluded from all maps and calculations. The data suggests that 83 percent of jobs in education services can be done from home. While this may have been true when many schools were running virtually, it is not likely an accurate estimate in the long-term. For simplification and because we do not have survey data to recalculate the number, we excluded these jobs for now.
  • All maps and calculations were created using the Residence Area Characteristics (RAC) and Workplace Area Characteristics (WAC) data files from LEHD Origin-Destination Employment Statistics (LODES). This data allows for more details on jobs by industry, but does not distinguish between inter-jurisdiction commuters vs. intra-jurisdiction commuters. In the upcoming brief, we also look at the Origin-Destination (OD) data file from LODES, which does not have detailed industry information, but distinguishes between inter-jurisdiction commuters vs. intra-jurisdiction commuters.

Authors

Bailey McConnell

Former Research Director, Rivlin Initiative
D.C. Policy Center

Bailey McConnell is Research Director for the D.C. Policy Center’s Alice M. Rivlin Initiative for Economic Policy & Competitiveness. In this role, she assists with the management and implementation of the Policy Center’s economic and competitiveness research. Prior to joining the D.C. Policy Center, Bailey worked as a Research Analyst in the Washington, D.C. office of HR&A Advisors, a real estate consulting firm. She has also worked as an Legislative Intern with the House Committee on Energy and Commerce and as an Economic Opportunity and Financial Inclusion Intern with the National League of Cities. 

Bailey is originally from Pittsburgh, Pennsylvania and holds a bachelor’s degree in Economics from Boston University. 

You can reach Bailey at bailey@dcpolicycenter.org.

Yesim Sayin

Executive Director
D.C. Policy Center

Yesim Sayin is the founding Executive Director of the D.C. Policy Center.

With over twenty years of public policy experience in the District of Columbia, Dr. Sayin is recognized by policymakers, advocates and the media as a source of reliable, balanced analyses on the District’s economy and demography.  Yesim’s research interests include economic and fiscal policy, urban economic development, housing, and education. She is especially focused on how COVID-19 pandemic is changing regional and interregional economic interdependencies and what this means for urban policy. Her work is frequently covered in the media, including the Washington Post, the Washington Business Journal, the New York Times, the Wall Street Journal, WAMU, and the Washington City Paper, among others.

Before joining the D.C. Policy Center, Dr. Sayin worked at the District of Columbia Office of the Chief Financial Officer leading the team that scored the fiscal impact of all legislation the District considered. She frequently testified on high profile legislation and worked closely with the executive and Council staff to ensure that policymakers fully understand the fiscal implications of their proposed legislation. Yesim also has worked in the private sector, and consulted with international organization on a large portfolio of public finance topics.

Yesim holds a Ph.D. in economics from George Mason University in Fairfax, Virginia, and a bachelor’s degree in Political Science and International Relations from Bogazici University, located in Istanbul, Turkey. 

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