Economists recognized early on in the pandemic that working from home is here to stay

When Amazon told staffers last month to come back to the office five days a week, many observers reacted as if an earthquake struck the post-pandemic world of work. To Stanford economist Nicholas Bloom, the news barely registered.

“I doubt it will change anything,” he says, dismissing the notion that Amazon’s mandate means many companies will rescind their work-from-home policies.

By now—more than four years after COVID-19 triggered one of the country’s largest labor shocks since World War II—Bloom and his longtime collaborator Steven Davis of Stanford have gotten used to the frequent headlines questioning the staying power of working from home.

The pair, both senior fellows at the Stanford Institute for Economic Policy Research (SIEPR), have been on the forefront of remote work research from the onset of the pandemic. And the skeptics, they say, are wrong.

Their research finds that, despite the headline-grabbing pullbacks, work-from-home rates are holding steady—with about one-third of the U.S. workforce (quadruple pre-pandemic levels) logging in remotely at least two days a week.

Employees, especially those with children, are willing to take a pay cut and stay in their jobs when given the perk of staying home two or three days a week. And through their studies, they have dispelled as a myth the belief that “the bed, the fridge, and the television” are the enemies of working from home. When managed well, employees on a hybrid schedule are just as productive as they are when in the office.

“The pandemic removed the stigma of working from home and accelerated by a few decades where we would have ended up eventually,” says Davis, the Thomas W. and Susan B. Ford Senior Fellow and director of research at the Hoover Institution.

Remote work’s implications go far beyond workers and their employers. Major cities like San Francisco and Washington, D.C., are grappling with how to respond to declining revenues given the drop in commuters and takeout lunches. Commercial and home real estate markets are shifting. Companies big and small are developing tools and services to improve remote work for employees and businesses.

Research has indicated, too, that there are potential consequences for exacerbating inequality when it’s mostly college-educated workers in higher-paying jobs who get the opportunity to work from home.

“Even burglars have been affected,” says Bloom, the William Eberle Professor of Economics in Stanford’s School of Humanities and Sciences, citing a study of daytime crime rates. “You can’t break into homes when owners are sitting at the coffee table with their laptops.”

Research has and will continue to play a pivotal role in understanding how working remotely is impacting society and the economy, Davis and Bloom say.

In 2022, they organized the first Remote Work Conference at Stanford to examine the latest research and explore unanswered questions. The third annual conference, sponsored by Hoover and SIEPR, is set for Oct. 9–11.

Davis and Bloom’s closest collaborator on work-from-home research is Jose Maria Barrero, a former advisee of Bloom and now an assistant professor of finance at the Instituto Tecnológico Autónomo de México.

“We are only at the end of the beginning of the remote work revolution,” Bloom says, “and the research needed to understand its full effects.”

Remote work’s research desert

Much of the credit for what we know today about working from home dates to 2011—when Davis and Bloom first forged a connection at a National Bureau of Economic Research meeting in Boston. At that time, Bloom was doing some work on perceptions of economic uncertainty, which can slow GDP growth.

Davis, then a professor at the University of Chicago, and Bloom got to talking over beer at the Royal Sonesta hotel about how they might work together to shed light on the hard-to-measure phenomenon of uncertainty.

Five years later, some of the ideas they sketched out that day were published in The Quarterly Journal of Economics. The “Measuring Economic Policy Uncertainty” study, co-authored with Scott Baker of Northwestern University, remains one of the most cited papers in the social sciences of the last 10 years. The three academics have since tracked levels of uncertainty globally and within 30 individual countries.

When COVID lockdowns began in 2020, research into remote work—or telecommuting, as it was long known—was scant. Bloom was one of the few scholars to have published a large-scale study. It centered on a remote-work experiment at a China-based online travel company, Ctrip, that was looking to cut back on office real estate costs.

Released in 2013, and later published in The Quarterly Journal of Economics, the conclusions were mostly positive: Remote employees were more productive, satisfied with their jobs, and less likely to quit. The one downside was that they weren’t promoted as often.

“My thought at the time was, “Okay, this works quite well for some, but probably not for most,'” recalls Bloom. “Even I wasn’t convinced that hybrid work made sense.”

When the CEOs came calling

But the research took on new life when the pandemic hit. With millions of office workers sheltering in place at home, journalists uncovered Bloom’s Ctrip paper and clamored for his insights into what the tectonic labor shift meant.

Bloom and Davis, by now not just research collaborators but also good friends, pivoted. For six years, in addition to their ongoing work in economic uncertainty, they had been examining expectations and managerial practices through a monthly survey of business executives with the Federal Reserve Bank of Atlanta.

In short order, they added questions about how these executives saw the work-from-home experiences at their own firms and their expectations for how it might play out into the future.

Wanting, too, to hear from workers, they recruited Barrero to help design and run the Survey of Working Arrangements and Attitudes, beginning in May 2020.

Roughly 8,000 U.S. workers complete the survey each month. Along with a separate global version, it is now one of the most closely watched measures of changing attitudes and policies around remote work and the basis for multiple papers authored by Bloom, Davis, and Barrero to date.

It didn’t take long for their research to make a big impact. In the fall of 2020—not long after the trio predicted that one-third of U.S. employees would work remotely at least two or three days a week—Fortune 500 CEOs and company directors started reaching out, one by one. They had questions, lots of them, for Bloom and Davis.

The head of one of the country’s largest banks wanted to know whether working from home was just a passing fad or a permanent change. A Big Tech chief executive wondered if he should close company retail stores located near now-vacant financial districts. And the board of a well-known restaurant chain wanted guidance on what to do because nobody was ordering catered office lunches on Mondays and Fridays anymore; they all wanted meals delivered Tuesday through Thursday.

“There was a real tension between what senior managers wanted to have happen and what they were forced to acquiesce to given the new market realities,” says Davis, who joined Stanford in 2023 after more than 35 years at the University of Chicago’s Booth School of Business.

“At one point,” he continues, “we asked workers, ‘How many times has your employer implemented a return-to-office mandate? Is it 1, 2, 3, 4 or 5?'”

Their research, individual and collectively, consistently reaffirms that hybrid work is good business for many companies. In a larger follow-on study of Ctrip, the online Chinese travel agency, that was published in Nature in June, Bloom confirmed his earlier findings, with one notable exception: Hybrid employees’ chances of getting promoted were not affected by remote work.

“The pandemic forced us to experiment with a very different way of working, for weeks and months on end,” Davis says. “And we’ve discovered, contrary to what many economists predicted, that not only does it work well in many settings, but also that we’re getting better at it.”