Funding source: U.S. Department of Transportation

Contract number: 69A3551747114

Funding amount: $100,000

Performance period: 8/16/2021 to 8/15/2022

Research Products: https://ncst.ucdavis.edu/project/spatial-implications-telecommuting-united-states

Perhaps no event in recent history has as much potential to utterly transform the spatial distribution of economic activity as the surge in working from home that has occurred in 2020 following the Covid-19 pandemic. Years of steady technical progress have increased the feasibility of remote arrangements. Now, in one fell swoop, one-third of the workforce has made a forced investment in the skills and equipment needed to work out of their homes. Survey after survey of managers and the workers themselves indicate the likelihood that some-perhaps all-of the increase in remote work will become permanent and will have sizable effects on location choices of workers.

In order to assess the potential medium and long-run impact of these changes on the demand for transportation, a sufficiently-detailed quantitative spatial equilibrium model is essential. Any decline in commuting resulting from increased remote work is likely to be very heterogeneous across com- muting routes. Moreover, as workers reposition themselves within cities, demand for some routes could actually increase. Such a major change in the technology of work may also trigger significant reallocations of jobs and residents across cities. Because of this, some areas may see their demand for all kinds of transport increase.

We propose to build a quantitative spatial model of the contiguous United States. It will be informed by data on telecommuting potential for different industries and occupations, as well as detailed geographic data on transport infrastructure, observed commuting flows, wages, real estate prices, and education levels. This will allow the model to make predictions about the reallocation of jobs and workers both within and across U.S. metro areas, and the resulting changes in transport demand, under a number of plausible long-run remote-working scenarios. In particular, we will be able to make predictions for California and its major metropolitan areas, such as Los Angeles, San Francisco-San Jose, Riverside-San Bernardino, San Diego, and Sacramento.

The scarcity of prior work on this topic is one reason why we believe it is important to pursue this project. One recent study is our own, Delventhal, Kwon, and Parkhomenko (2020a), in which we studied the impact of remote work using a quantitative spatial equilibrium model of a single urban area-Los Angeles-modeled as a closed city. Another study of ours, Delventhal and Parkhomenko (2021), broadens the scope to consider the urban landscape of the entire continental United States, and represents a starting-point for what we plan to accomplish in the course of the proposed project. One other recent paper is Lennox (2020), who explores the effects of working from home in an Australian context. Prior to these studies, a number of primarily theoretical papers explored the spatial implications of telecommuting using highly stylized models.