High-speed internet to boost work from home

Study finds high productivity can increase US economic output by $160b per year

Reuters July 29, 2021


More people will work from home in the future – and if high-quality internet access is available to all Americans, that could lead to a sustained boost in worker productivity which could increase economic output by $160 billion a year.

That was the main conclusion of a new study released on Wednesday by the Aspen Economic Strategy Group.

Before the pandemic, about 5% of full workdays were done from home. That spiked during the pandemic as Americans hunkered down to avoid infection and, while it will decline, is expected to settle at about 20% of full workdays going forward, said Steven J Davis, an economist at the University of Chicago, who did the study with Nicholas Bloom of Stanford University and Jose Maria Barrero of the Instituto Tecnologico Autónomo de Mexico.

“If you suddenly shift a lot of people to a different location, it becomes more important that this new location is a productive one,” and the quality of internet access is key to increasing productivity, said Davis.

According to his calculations – based on an ongoing survey of workers and employers on work-from-home issues – providing high-quality internet access would raise earnings-weighted labour productivity by an estimated 1.1%.

The calculations are adjusted for earnings because a disproportionately large share of workers who will work from home in the future are higher-skilled, well-paid workers.

As demonstrated during the pandemic, many lower-skilled jobs do not lend themselves to remote work.

The researchers also concluded that better home internet access could increase the propensity to work from home in the future. If that were to happen, it would “slightly” raise their estimate for the productivity gains, according to the paper.

Published in The Express Tribune, July 29th, 2021.

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