The Covid-19 health crisis has led to a substantial increase in work done from home, which shifts economic activity across geographic space. We refer to this shift as a ‘Zoomshock’. The Zoomshock has implications for locally consumed services; the clientèle of restaurants, coffee bars, pubs, hair stylists, health clubs located near workplaces now demand those services near where they live. In this paper we measure the Zoomshock at a granular level for UK neighbourhoods. We establish three important empirical facts. First, the Zoomshock is large; many workers can work- from-home and live in a different neighbourhood than they work. Second, the Zoomshock is very heterogenous; economic activity is decreasing in productive city centres and increasing residential suburbs. Third, the Zoomshock moves workers away from neighbourhoods with a large supply of locally consumed services to neighbourhoods where the supply of these services is relatively scarce. We discuss the implications for aggregate employment and local economic recovery following the Covid-19 pandemic.
Figure 1: Dynamics of the share of Better scientists in the tenured population
De Fraja, Gianni, Matheson, Jesse, and James Rockey, “Zoomshock: The geography and local labour market consequencs of working from home.” Covid Economics 64: 1–41. https://cepr.org/system/files/publication-files/101416-covid_economics_issue_64.pdf .
The articles below provide overviews of the impact of remote work on where local services are demanded and the implications of this for local economies, etc.