You can do more work at home. But you would have better ideas in the office.

Edward Glaeser, Fred and Eleanor Glimp professor of economics at Harvard University, is co-author of “Survival of the City: Living and Thriving in an Age of Isolation”.

David Cutler, Otto Eckstein Professor of Applied Economics at Harvard University, is co-author of “Survival of the City: Living and Thriving in an Age of Isolation”.

September 9 Microsoft canceled plans for an October 4 return-to-office target date and said he would no longer plan when he would fully reopen his work sites in the United States. Other companies, including Apple and Amazon, have postponed their planned reopenings in early 2022 due to the sharp increase in coronavirus infections and the uncertainty surrounding the delta variant. During this time, Kastle Systems Desktop Usage Index in 10 major metropolitan areas shows that office traffic rose steadily from January to July 2021, then suddenly reversed course.

As long as the coronavirus rages, a significant portion of the U.S. workforce will remain on Zoom. What does this mean for economic productivity? Some commentators are optimistic: after all, there are signs that productivity – the inflation-adjusted value of goods and services produced per hour of work – has actually increased in the age of working from home. Between the second quarter of 2020 and the second quarter of 2021, labor productivity increased by 1.8% compared to an average annual increase of 1.4% from 2005 to 2019.

However, it is difficult to interpret these data. Some of the largest productivity gains have occurred in the manufacturing of durable goods (the manufacture of items like cars and appliances) – a capital-intensive sector that is largely unaffected by the tendency to work from home. Meanwhile, many of the service sector companies, such as bookstores and shoe stores, which experienced the biggest productivity booms from 2019 to 2020 also saw significant declines in employment, and it didn’t. Perhaps it’s no surprise that a smaller staff of either the most skilled workers is going to be more productive, per person. When job losses occur disproportionately in low productivity sectors, such as service work – as happened during the pandemic – it can also increase overall productivity figures. Nonetheless, some economists have calculated that a substantial shift to a work-from-home economy could lead to a permanent increase in productivity, perhaps due to the reduction in travel and less distractions that can accompany office life. .

But we don’t think it’s likely. Research suggests that a shift to permanent remote work would make all of us less productive.

People who switch to working from home may temporarily increase the amount of work they do in any given day. But in the medium to long term, distance employment may not provide key benefits – including learning and new friendships – that flow from face-to-face contact. Face-to-face work fosters innovation, the effects of which on productivity almost certainly outweigh the gains from working harder at home during perhaps unsustainable times. An even slightly higher rate of growth once people return to the office will quickly outweigh the one-time gain in commute time saved.

None of this is to say that all white collar workers should return to the office five days a week. The pandemic will surely accelerate the move towards a hybrid model that involves a few days at home and others in the office, giving workers a welcome new flexibility. Still, it’s important to understand the downsides of the work-from-home economy.

Research has long linked inequality to reduced economic growth, and working from home will make society more unequal. In May 2020, while more than two-thirds of Americans with graduate degrees telecommuted, less than 15% of Americans with a high school diploma or less were doing so. But there are divisions even among white-collar workers: the remote world may seem like heaven to middle-aged professionals with vast networks of colleagues and comfortable home offices, for example, but it’s decidedly less appealing to 20-year-olds. and over trying to find their way into a new business and to work in dark, cramped apartments. Over time, these workers may have a harder time securing promotions and thriving more generally.

Studies of remote working before and during the pandemic support this intuition. In separate analyzes, economists looked at what happened when a Chinese travel agency and a large US retailer divided their call centers into groups that worked from home and groups that came to the office. (The Chinese company randomized its workers into the two groups. The US retailer divided its employees less formally.) In both cases, home workers handled at least as many calls as those in the office. . In the case study of the Chinese company, published in 2015, productivity increased by 13% among those who worked from home. In the US case study, employees who walked away – this too happened before the pandemic – saw their calls per hour increase by 7.5%, a nice boost to productivity in the short term.

But in both studies, the likelihood of being promoted for remote workers was roughly halved compared to people who worked in person, suggesting serious long-term consequences of remote working. In the US study, for example, 23% of on-site workers were promoted in their first 12 months on the job, while the distance promotion rate was 10%. Promotion meant being assigned more difficult calls, often with angrier customers. How would you learn to handle those calls if you couldn’t follow the example of the workers around you? How would your boss find out you had the right touch for that particularly angry Toledo buyer?

A similar dynamic seems to exist in the tech world. Looking at hard data on the progress of its programmers, such as specific software contributions, bug fixes, and new features, Microsoft reported in January that “developer productivity was stable or increasing at Microsoft and elsewhere after COVID “. (However, 30% of company workers surveyed reported lower productivity during the pandemic.) More recently, however, Microsoft researchers concluded that “company-wide remote working has made more static and siled worker collaboration network, with fewer bridges between disparate parties. They have also seen an evolution from synchronous communication (such as meetings, phone calls, and video sessions) to asynchronous communication (e.g. emails and SMS). This reduction in the number of new connections and real-time conversations has led researchers to fear that it will be “more difficult for employees to acquire and share new information on the network.”

Distance learning difficulties seem to make companies particularly reluctant to hire new workers in remote positions. When the pandemic began, employment and assignments fell for all jobs as demand crunched across all industries. By October 2020, however, non-remote job postings had returned to pre-Covid levels. In contrast, remote job vacancies fell 35% from February to December 2020. In industries where people worked remotely, the online world seemed to work better for those who were already insiders than for foreigners who were working remotely. hoped for a better future.

The information-rich nature of face-to-face contact led the great English economist Alfred Marshall to write over 130 years ago that when workers congregate in dense clusters, “the mysteries of the trade no longer become a mystery but are, so to speak, in the air. “This remains true. Found that migrants to metropolitan areas see their wages increase month by month, year after year, which is most compatible with the idea that people become more productive by becoming entangled in a dense, dynamic and face-to-face environment.

Many other studies confirm this idea, approaching the question from several angles. To consider emergency call data centers – the equivalent of 911 in England. In some cases, the person taking the call is in the same room as the person sending the agent, and in some cases, they are in different rooms. Data shows that an agent’s dispatch time is shorter when the two are in the same room, and even shorter when their desks are closer to each other. This despite the fact that the initial information is completed and transmitted electronically. In the academic world, research articles written by collaborators in the same building are cited more frequently later than articles from contributors from different universities (or even from co-authors in different buildings of the same university).

And while some people might be inclined to separate discussions of online schooling from discussions of distance work, both involve the creation and dissemination of new ideas. Much research shows that the online classroom experience has been disastrous for learning: study in the Netherlands found that even under ideal conditions, including high rates of broadband access and sufficient funding, “students made little or no progress while learning at home” and that “the learning loss was more pronounced among students from disadvantaged homes “.

The appeal of the home-based economy is nothing new. Forty years ago, futurist Alvin Toffler claimed that the new communication technologies of the time (fax machines, early computers) would cause people to abandon offices and leave cities empty. Toffler was wrong at the time – metropolitan economies rose from their post-industrial ashes – and the rest.

A certain amount of telecommuting will go on forever; it is just too practical to go away completely. But 21st century businesses compete in deploying knowledge and creativity, and these things are triggered more easily when people are in the same room. The video can help us get by for a while, but to get back on our feet we’ll have to get back to the office.

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