Working From Home and Covid-19: Where Could Residents Move to?

Abstract

As a protective measure during the Covid-19 pandemic, in Spring 2020, a high number of employees began relocating their workplace to their homes, many for the first time. Recent surveys suggest that the share of those working from home (WFH) will remain higher than before the pandemic in the long term too - with correspondingly fewer commuting journeys. Workplaces are still often concentrated in inner cities, into which workers commute from more outlying areas. However, classical geographical economic theory suggests that a reduced need for commuting might lead to a reorientation of residential preferences amongst employees towards even fewer urban areas, as households trade off the disamenity of commuting against lower housing costs and more living space. This article investigates how such consequences could unfold in space. The Munich Metropolitan Region is characterised by a high share of knowledge-based jobs suitable for WFH and thus serves as our case study. We collect data at the municipality level for relevant aspects of residential location choices and develop an index for the potential of additional residential demand through increased WFH for each municipality in the Munich Metropolitan Region. Crucially, a municipality's potential depends on the number of commuting days per week. Keeping the weekly commuting time budget constant, an increase in WFH, or a reduction in commuting days allows a longer commuting time per trip. We visualise our results and sensitivities with maps. We observe a gradual yet discontinuous decay of potentials from the region’s core to the fringes with an increase in WFH days.