KC Fed, Report:  The Shifting Expectations for Work from Home

“Prior to the COVID-19 pandemic, occasional work from home was common for some workers. However, with the onset of the pan­demic, many workers were initially forced to work from home. This shift, along with additional investments employers made in technology, has accelerated the trend in work from home. We find that on average, workers in December 2022 worked from home around 27 percent of time, nearly double the pre-pandemic estimate. Moreover, the gap be­tween workers’ preferences for work from home and their expectations of their employers’ plans has declined over the past two years. The gap appears to be closing due to upward movement in employers’ plans. Our estimates suggest that if the trends in work from home continue, this gap may nearly close in the next three years.”

“Despite this shift in preferences towards work from home, our find­ings suggest that higher income workers in more densely populated areas are most likely to be affected by this shift. Although it is too early to tell where work from home trends will settle, it is likely that workers with this flexibility and areas with a higher concentration of remote work will stand a better chance of weathering an economic downturn. Our findings suggest that work from home is more likely to stick in larger urban areas, potentially providing more economic flexibility and resiliency to these areas relative to smaller urban and rural areas.”