Containing COVID-19 has required more people to work from home, accelerating the trend towards teleworking. Many firms have committed to making a permeant shift to remote and flexible working. Working from home benefits employees by saving time commuting but deprives firms of the benefits from information and knowledge spillovers. Research suggests GDP will be maximised if employees work from home just once or twice a week.
Containing Covid-19 has required more people to work from home, accelerating the trend towards telecommuting. This column uses a general equilibrium model to analyse the long-term effects of this trend, and finds that it may prove to be a mixed blessing. Working from home saves time that would be spent commuting but deprives firms of the