DP17431 Remote working and the new geography of local service spending

Author(s): Gianni De Fraja, Jesse Matheson, Paul D Mizen, James Rockey, Shivani Taneja
Publication Date: July 2022
Keyword(s): Hospitality industry, Local Labour Markets, Local personal services, Remote working, Retail industry, work-from-home
JEL(s): H12, J01, R12
Programme Areas: Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=17431

Remote working, at least some of the time, has rapidly become the new norm in many sectors. Remote working changes where workers spend much of their time, and because of this, it also changes the geographical location of demand, particularly in sectors which supply local personal services (LPS). We quantify this change for England and Wales. To do this, we use a bespoke, nationally representative, survey of nearly 35,000 working age adults, which predicts long-term changes in remote working and in LPS spending while at work. On average, we find that a neighbourhood to which people commute 20% less often experiences a decline in LPS spending of 7%. There is a clear geographic pattern to these spending changes: large decreases in LPS demand are concentrated in a small number of city-centre neighbourhoods, while increases in LPS demand are more uniformly distributed. Further analysis of neighbourhoods geographical and socio-demographic characteristics shows the least affluent neighbourhoods see least benefit from remote work.