Who Should Work from Home During a Pandemic? The Wage-Infection Trade-off

Abstract

Shutting down the workplace is an effective means of reducing contagion but can induce large economic losses. We harmonize the American Time Use Survey and O*NET data to construct a measure of infection risk (exposure index) and a measure of the ease with which a job can be performed remotely (work-from-home index) across both industries and occupations. The two indexes are negatively correlated but distinct, so the economic costs of containing a pandemic can be minimized by sending home only those workers that are highly exposed to infection risk but that can perform their jobs easily from home. Compared with a lockdown of all non-essential jobs, which includes many jobs not easily performed from home, a more selective policy can attain the same reduction in aggregate infection risk (32 percent) with one-third fewer workers sent home to work (24 percent vs. 36 percent) and only half the aggregate wage loss (15 percent vs. 30 percent). In addition, moving to such a policy reduces the infection risk of low-wage workers the most and the wage losses of high-wage workers the most. Our crosswalk between the American Time Use Survey and O*NET data can be applied to a broader set of topics.