Intercity impacts of work-from-home with both remote and non-remote workers

Abstract

This paper generalizes the simple two-city work-from-home model of Brueckner et al. (2022) by adding a group of non-remote workers, who must live in the city where they work. The results show that the main qualitative conclusions of BKL regarding the intercity effects of WFH are unaffected by this modification, with WFH yielding the same aggregate population and employment changes in the two cities and the same house-price and wage effects as in the simpler model. Even though the aggregate population effects are the same, the population relocation of non-remote workers is in the opposite direction to that of remote workers, which matches the direction in BKL. These conclusions are useful because they establish the robustness of BKL's highly parsimonious model. The paper also contains material surveying other theoretical research on WFH as well as empirical work in the area, including BKL's empirical findings in support of their model.