The Evidence Base

Informing Policy in Health, Economics & Well-Being
A collaboration with
USC Dornsife Center for economic and social research

Will the Rise of Work From Home Improve Our Health?

Millions of Americans gained experience with working from home (WFH) during the COVID-19 pandemic and many of them now hope and expect to continue to have this opportunity. As the pandemic becomes endemic, major companies have announced varying polices about the future of remote work. I argue that government and industry should accommodate WFH or hybrid plans because the benefits are manifold.

Less Commuting, Less Stress

Workers who commute to work only two days a week could enjoy an average time savings of five hours per week or more. This time “windfall” opens up new opportunities for improving  mental and physical health. This additional time could be used for exercising or spending time with family and friends, which could reduce stress-related health problems.

The causes and consequences of stress in daily life are intuitive, albeit difficult to measure. Consider a worker who must commute on a snowy February day in Chicago from a suburban home to an urban office.  This worker must bundle up in outerwear, drive to a train station, park, wait for the train, ride to the downtown station, and then walk or take transit to work. The stress from this grinding commute dramatically diminishes if the worker must only appear at the workplace one or two days a week. Now consider that the worker is juggling several responsibilities at home, such as caring for a sick child or aging parents—the time saved from not commuting and reduced stress are an even greater benefit to the worker.  

Moving Can Be Healthy

US Postal Service data on address changes  during the pandemic reveals that many people moved away from America’s largest cities or moved within them as they left the center city and moved to the suburbs and the exurbs. While some of these moves may have been due to added financial or childcare strain caused by the pandemic, many office workers took advantage of the flexibility acquired from working from their home and chose to live in places they had not considered before because of employment responsibilities.

Going forward, those with the ability to engage in part-time or full-time WFH will be free to live where they want now that their commute does not pin them down. When workers live where they want to be, they will be happier, healthier and potentially more productive. Asthmatics will be more likely to live in places with cleaner air. Those who love to ski will be more likely to move to the mountains. Those with a sick aging mother can choose to live near her for a time and this reduces family stress.

Will the Rise of WFH Increase Health Disparities?

Imagine a case where college graduates can engage in WFH while those who have not gone to college cannot. Given that college graduates earn more than non-college graduates, this new “perk” of WFH flexibility would mean that the rise of WFH will further the growth of inequality in our society. 

But consider two optimistic alternatives. First, the rise of WFH workers moving to new areas creates local service sector jobs for other people, and that means new opportunities. For example, if some WFH workers move to a ski area to live full time, this creates new local service sector job demand. Planners and policymakers in these areas will need to ensure cost of living does not rise disproportionately and place pressure on current residents. Furthermore, rents could actually decline if real estate developers are allowed to build more housing in desirable areas.  Local NIMBYism will play a key role in determining how much gentrification takes place in high amenity areas where WFH workers move to. 

If rents in high amenity WFH destination areas are lower than the rents in big cities, then non-WFH eligible workers who want to move or live elsewhere will gain from being able to live and work where they actually want to be. Second, air pollution is lower in smaller cities.  If non-WFH workers leave the densely populated center cities, their exposure to particulates in the air will decline. Thus, the benefits from this trend have the potential to extend beyond the college-educated tech office worker. 

Working From Home Saves Companies Money  

Corporations that offer health insurance to their workers have strong incentives to experiment with WFH. If WFH improves worker health, then the firm gains twice. The workers will be happier and more productive.  The firm’s insurance premium costs will decline as the workers will demand fewer health services.  

During the pandemic, more than 35% of American Workers were engaging in WFH. The full health gains from the rise of WFH will manifest themselves in the upcoming years as our firms adopt hybrid work schedules even as COVID fades as a motivation.  WFH workers will gain from having less stress in their lives. How this translates into healthier habits remains an open empirical question.

Matthew E. Kahn is the Director of the Healthcare Markets Initiative at the USC Schaeffer Center and the author of the new book Going Remote.