Editor’s note: The paper behind this column appears in the first issue of CEPR’s new initiative, Covid Economics: Vetted and Real-Time Papers.
Evaluating the economic impact of ‘social distancing’ measures taken to arrest the spread of COVID-19 raises a number of fundamental questions about the modern economy. How many jobs can be performed at home? What share of total wages are paid to such jobs? How does the scope for working from home vary across cities or industries?
To answer these questions, we classify the feasibility of working at home for all occupations and merge this classification with occupational employment counts for the US. Our approach is in a similar spirit to what Blinder (2009) did for outsourcing and what Mas and Pallais (forthcoming) have done for alternative work arrangements.1
Our feasibility measure is based on responses to two Occupational Information Network (O*NET) surveys covering “work context” and “generalized work activities.” For example, if answers to those surveys reveal that an occupation requires daily “work outdoors” or that “operating vehicles, mechanized devices, or equipment” is very important to that occupation's performance, we determine that the occupation cannot be performed from home. We merge this classification of O*NET occupations with information from the US Bureau of Labor Statistics (BLS) on the prevalence of each occupation in the US as well as in particular US cities and industries.
In Dingel and Neiman (2020), we offer a more detailed description of our classification method as well as an accompanying replication package that allows researchers to modify this classification scheme to produce results based on their own assessment of the plausibility of working at home for each type of job. We hope our code will also be used by others to evaluate the share of jobs in other countries that can be performed at home.
Results for the United States
Our classification implies that 37% of US jobs can plausibly be performed at home.
We obtain our estimate by identifying job characteristics that clearly rule out the possibility of working entirely from home, neglecting many characteristics that would make working from home difficult.2 Our estimate is therefore an upper bound on what might be feasible and greatly exceeds the share of jobs that in fact have been performed entirely at home in recent years.
According to the 2018 American Time Use Survey, less than a quarter of all full-time workers work at all from home on an average day, and even those workers typically spend well less than half of their working hours at home.3 Workers in occupations that can be performed at home typically earn more. If we assume all occupations involve the same number of hours of work, the 37% of jobs that can plausibly be performed at home account for 46% of all wages.
There is significant variation in this percentage across cities and industries. More than 45% of jobs in San Francisco, San Jose, and Washington, DC could be performed at home, whereas this is the case for 30% or less of the jobs in Fort Myers, Grand Rapids, or Las Vegas (see Figure 1). Whereas most jobs in finance, corporate management, and professional and scientific services could plausibly be performed at home, very few jobs in agriculture, hotels and restaurants, or retail could be. Readers can download here tables that report the share of jobs that can be done at home for each US metropolitan statistical area and for each 2-digit NAICS industry.
Figure 1 Share of jobs that can be done from home, metropolitan statistical areas
As an alternative to our baseline classification, we each manually assigned values of 0, 0.5, or 1 to each 5-digit SOC code based on introspection. Averaging our two judgments resulted in values of 0, 0.25, 0.5, 0.75, and 1. Using this alternative measure produces highly similar results.
Due to COVID-19, many employees are unable to travel to work. Identifying which jobs cannot be performed from home may be useful as policymakers try to target social insurance payments to those that most need them. Likewise, the share of jobs that could be performed at home is an important input to predicting the economy's performance during this or subsequent periods of social distancing. We note, however, that it is not straightforward to use these values to estimate the share of output that would be produced under stringent stay-at-home policies. An individual worker's productivity may differ considerably when working at home rather than her usual workplace. More importantly, there are likely important complementarities between jobs that can be performed at home and those that cannot. Incorporating our measures together with these richer considerations is a fruitful avenue for future research.
Blinder, A (2009), “How Many US Jobs Might be Offshorable?,” World Economics 10(2): 41–78.
Blinder, A and A Krueger (2013), “Alternative Measures of Offshorability: A Survey Approach,” Journal of Labor Economics 31(S1): 97–128.
Dingel, J and B Neiman (2020), “How Many Jobs Can be Done at Home?”, Covid Economics: Vetted and Real-Time Papers 1: 16-24.
Mas, A and A Pallais (forthcoming), “Alternative Work Arrangements,” Annual Review of Economics.
1 We cannot simply use Blinder's index because the feasibility of working from home is quite distinct from offshorability. For example, Blinder and Krueger (2013) write, “we know that all textile manufacturing jobs in the United States are offshorable.” Textile manufacturing jobs, of course, cannot be performed at home using current production technologies.
2 For example, our classification codes 98% of the 8.8 million teachers as able to work from home, which seems sensible given the large number of schools currently employing remote learning. Re-coding these teaching jobs as unable to be performed from home would, in the aggregate, reduce our estimate of the share of jobs that can be performed at home by about five percentage points.
3 Citing the Quality of Worklife Survey and the Understanding American Study, Mas and Pallais (forthcoming) report that less than 13% of full- and part-time jobs have a formal “work-from-home” arrangement. They write that the “median worker reports that only 6% of their job could be feasibly done from home,” but plenty of jobs, including those in “computer and mathematical” and “business and financial operations” can do a majority of their work from home. We note that, in the context of the response to COVID-19, there is an important distinction between being able to do most and all of one's work at