Covid-19 has affected the labour and land markets in multiple ways. Unemployment rates have increased, while daily office presence in many workplaces is no longer mandatory. Working from home (WFH) has become a new reality for a lot of employees (mainly office workers) and is now more popular than ever. The transition to remote work has certainly been challenging for a large number of employees. Creating home office space and finding the right technology are two of the problems that people have encountered. At the same time, WFH has created some positive unintended consequences. It has reduced congestion and has improved the air quality in some of the most polluted cities of the world.
But is WFH likely to persist in the post-covid era? Preliminary estimations show that both employers and employees embrace the flexibility and will permanently adopt new remote work routines, allowing employees to work-from-home multiple days a week. In addition, according to estate agents, people are reassessing their housing needs, which has already increased the demand for larger houses or apartments in many big cities. Remote workers want more space and seem willing to locate at the outskirts of big cities. At the same time, firms need smaller space and vacate part of their buildings. These new needs for housing and office space will probably increase the commuting distance between firms and workers. Moreover, all these changes in the demand for office and housing space will likely change the internal structure of cities, with jobs moving to the core of the city and residents moving to the periphery, occupying more space. In such a case, it is unclear if the new structure of the city –with the smaller business cluster at the centre, the larger residential area in the suburbs and the longer commuting distance – is desirable from an ecological perspective. It is thus interesting to investigate how less frequent commuting, smaller office space and the need for home office space or larger apartments will affect the size and the internal structure of cities, as well as whether WFH is good or bad for the environment.
This project combines urban and environmental economics in order to study how WFH changes the internal structure of a city and what are the impacts on the environment. Specific objectives of the project are to:
(i) Investigate how WFH will affect the land and labour market in cities with different structures;
(ii) Define the conditions under which WFH is good or bad for the environment, by taking into account the energy use of the housing, office and commuting sectors in different cities.