Working from Home, Wages, and Regional Inequality in the Light of COVID-19

Michael Irlacher, Michael Koch
2021 Jahrbücher für Nationalökonomie und Statistik  
AbstractWe use the most recent wave of the German Qualifications and Career Survey to reveal a substantial wage premium in a Mincer regression for workers performing their job from home. The premium accounts for more than 10% and persists within narrowly defined jobs as well as after controlling for workplace characteristics. In a next step, we provide evidence on substantial regional variation in the share of jobs that can be done from home in Germany. Our analysis reveals a strong, positive
more » ... lation between the share of jobs with working from home opportunities and the mean worker income in a district. Assuming that jobs with the opportunity of remote work are more crisis proof, our results suggest that the COVID-19 pandemic might affect poorer regions to a greater extent. Hence, examining regional disparities is central for policy-makers in choosing economic policies to mitigate the consequences of this crisis.
doi:10.1515/jbnst-2020-0030 fatcat:fr6ycgrouzc67oc5j2v5capcla