Cool New Work on Remote Work

- Five days a week in the office. Long commutes, crowded buses, traffic, congestion, cubicles, intrusive colleagues, ah, the joys of the work world. Oh wait, many of us no longer work that way, at least not five days a week. Not since the pandemic work from home. Rates have settled down since around 2023 to levels that are three or four times higher than they were before the pandemic. But the consequences for individuals, families, organizations, cities, the economy and society at large continue to play out. Stay tuned as we discuss some of these consequences in today's episode. Welcome to Economics Applied. I'm Steven Davis, senior fellow at the Hoover Institution and host of the show. Joining me is Nick Bloom. He's a professor of economics at Stanford, a prolific researcher, good friend, my collaborator on countless projects and all around. Good guy. Welcome Nick. It's great to have you back on the show. Show.

- Hey, thanks so much for having me on, Steve.

- So you and I helped organize the recent conference on remote work was held right here at the Hoover Institution with generous support from Hoover and from the Stanford Institute for Economic Policy Research. That conference featured 33 0 new studies on remote work and its consequences. So just a, a, a bounty of research in this area. And today we're gonna discuss some of the key insights that emerged from a few of those studies. We won't have time to talk about all of them and we're gonna tag team this a bit and as to who takes the lead on which paper. So we've got kind of my first topic area is wages or work from home amenities and wages. And one, one paper that was kind of nice on that, there's a paper titled Wage Penalties for Workplace Amenity by Jacob Jacob Sano. And the, the backdrop to this paper is we now have a lot of evidence that on the preference side of workers, most of them like the opportunity to work from home. You and I have done this, but there's many, some of this work, but there are many studies and the, it's, it's not unusual to find, it's pretty typical to find that workers say they'll, they're willing to give up seven to 8% of pay if they can work from home. Some of the time, not all the time. That's not the preference for most people, but some of the time. And business executives also tell us in the Atlanta Fed Survey of Business Uncertainty that they use work from home as a way to keep down the growth of labor costs. So that's the backdrop. But of course that's not the equilibrium outcome in the labor market. So what this paper is trying to do is figure out, well what is the actual compensating differential associated with working from home for those people who work from home when they could, they, they could have a job where they go to the office five days a week. And the challenge here is the statistical challenge is a pretty basic one, but we should, we should state what it is. The people who have the most opportunities to work from home tend to be highly skilled in high pay occupations and jobs. So if you just looked across people in the data, you'll find that, and we verified this, people who work from home a lot get paid more. And that's inconsistent with the idea that you have to give something up if you get to work from home. So what this paper does, the key innovation in this paper, and it's using the survey of working arrangements and attitudes, is when they look at this statistical relationship between work from home and pay controlling for a bunch of observable characteristics of the workers, they also control for what the person was earning in 2019 before the pandemic hit, which brought this explosion of work from home opportunities. And the bottom line in that paper is they find that given individual gives up about two or 3% of their pay for the opportunity to work from home most of the time as compared to going to the office five days a week. That's kind of interesting. It's consistent with this idea that employers can save on labor costs if they let people work from home. It also suggests that workers are still getting a lot of the benefits, the net benefits of work from home. Yes, they get two or three less, two or 3% less pay, but they get, you know, there's that extra piece between two or three and seven or eight that's just pure benefits to the workers. So I thought that was a pretty interesting study.

- Yeah, I mean it highlights in economics as this older, I think it's called the Nash bargaining rule. Yes. Which is a fancy name for saying we're split. So the Nash bargaining rule that, you know, I love it comes up in all these papers is basically there's some surplus was split at 50 50. And if you thought that the work, what, you know, a lot of the studies show in many jobs work from home. If you're working from home, say two days a week, you're as productive as you're fully in the office. So the productivity effects are zero and workers are valuing it about the same as, as you mentioned, six, seven, 8% under that scenario. The Nash bargaining, we'd like the, both the employer and the employee say gets three 4%. And this paper gets as close to that. It says, look, employees wages are cut by two 3%. So they're getting a bit over half the benefit. And so not surprising, they like work from home. 'cause sure they have a small pay cut, but they're prepared to pay more than that for it. And employers like work from home 'cause they're paying less for the same productivity.

- Yes. So that actually brings us to, I think the paper you wanted to talk about, which you tell us about it. But I think as I understand it, managers don't know how much workers really value work from home, which may explain why we're not all the way to the Nash bargain.

- Yes, exactly. So there's a paper called Do Firms Know What Workers Want? And Simon Cord has presented it. And the basic idea, the results echo something I've seen from talking by now I've talked to hundreds, thousands of, you know, firms and managers, which is it seems that managers underestimate how much employees value work from home. And the way they get at it is they run surveys in Germany. And these surveys are these classic surveys where they are ask you to choose jobs and they vary pay and very amenities, including work from home. And they ask, you know, which one would you pick? And then which one do you think other people will pick? And they know whether you are an employee or a manager. And what you find is managers underestimate how much employees will value work from home. So, you know, employees value it the same as six to 8% pay increase, but managers are thinking it's only worth one 2% and also managers themselves don't value it as much just for their own selves.

- Right. Psychological insight there.

- Yeah. And I think I've seen this, I, I've done a couple of randomized control trials out in China and we saw this again there, that managers weren't as keen on it as employees. They also valued it less in advance. And when they've tried it out, they became more pro. I think it reflects a couple of things. One is this kind of skepticism in a sense of managerial ranks. I think, you know, some of that, much of that has gone away. People have experimented. The bigger picture is managers and CEOs just aren't often the same as us. So I use this, if you think of, you know, the very tip of the top CEOs, think of Elon Musk. So Elon Musk, the world that Elon Musk lives in, he's driven around in, you know, an elite chauffeur vehicle probably

- He's not on a crowded bus,

- He's not on a crowded bus. He probably has a private plane, he probably has a whole army of childcare. You know, everything makes him, you know, it's not so painful for him to go into the office and back every day. And so he just, as we all do self extrapolates and projects onto others. And so I think it's one of those areas where execs can make mistakes, which is used gut instinct from their own experience to predict what others want. Right. You

- Know, this resonates with anecdotal evidence. I had some of these conversations, you had many more. But I remember thinking back to 2021 and 2022 in the early waves of the RTOs and I would talk to these senior executives who rolled out an RTO in their firm and were just dumbfounded by the extent of hostile pushback from their employees.

- Yeah,

- Yeah. They were genuinely surprised. So that's very much, that's just anecdotal evidence, but it's very much consistent with the story in this paper.

- Yeah. And I think to broaden it out, I suspect the same is true when they look at it actually, it's not just work from home, it would be things like maternity, paternity leave, job sharing hours. There's so what for, you know, for manager for economists, it's, you know, that there isn't full information and the systematic biases. And I guess that kind of goes a bit into behavioral economics, but you know, I, I have other work where you see that individuals tend to make all these kind of projection fallacies and it happens over and over again. But for, it's kind of harder for managers. You know, one thing is collect survey data, another thing is look at the market. What's the market suggesting employees want? It's unlikely that your employees are radically different from the typical ones out there. But yeah, it, it, it just suggests that gut instinct projecting yourself, you know, the typical manager in a large American company is probably in their fifties, you know, more likely than not is male, you know, is probably educated some elite institution. They're just not representative of the entire workforce.

- Right. Right. Yeah. So I guess especially in novel situations, projecting from your own pre based on your own, your own preferences and views can be dangerous. So, so that, that is an important insight for managers and for all of us really. So lemme move on to the second category papers, we'll talk about a couple here. Work from home and job performance. So I, I wanted to lead off with a paper title, the impact of RTO Mandates on Equity Market Analysts. I'll try to get the names right here. Hin Lee, Bian Wang and Jwe, you authors forgive me for if I didn't do a very good job on your names. What I liked about this paper, I thought this was the, one of the more persuasive studies that I've seen that identifies a set of workers and tasks and organizations where working remotely does have real downsides on productivity and not just in the pandemic setting where we were all of a sudden in an unanticipated manner forced to work remotely. The, this is what they're doing is they're looking at 35 RTO mandates by these brokerage firms. And the people we're talking about are equity analysts. So they are making forecasts of corporate earnings and there's a science and an art doing that that involves putting together soft information and hard information. And what they found is that in the, and, and these, these RTOs happened at different times at different firms, but you have overlapping sets of people at different firms, some of whom are working remotely, some of whom are working on site making forecast about the same corporate earnings. So you can do very good comp kind of treatment control comparisons. So this is a very well designed study and, and what they find is that these RTO mandates actually improved forecast accuracy, especially for younger and less experienced analysts who are probably the ones who are gonna benefit the most from consulting with co coworkers. And especially when the analyst was under time pressure to develop the forecast. And these, these, these effects were not, you know, they were, I don't, they were not trivial. And these RTO madness did though lead to higher quit rates consistent with the idea that yeah, people would rather work from home. But here's a setting. And I thought, as I said, this is one of the more persuasive studies I've seen picking a, a well-defined setting, high quality data showing that there really are productivity downsides in some work environments to working remotely.

- Absolutely. So I'll give you an anecdote and one other study. So the anecdote is, I had quite a long discussion with David Solomon, who is the CEO of Goldman Sachs about this. And he said, look, the reason they've been pushing to get people back is 'cause the mentorship model. And it would align, I goldman's probably in this data set, but be the same sense. And in fact, one of the papers I very briefly mentioned, you, you've covered it before in this podcast, but the power proximity by Emma Harrington, Natalia Emmanuel and Amanda Pale shows this learning effect. You see that when people are sat next to each other, particularly young, inexperienced people, they learn and they get better. So yes, I think for me the so was you don't necessarily need to be an everyday. So you know that what the study, I thought the study was great. What is less clear is are three days a week enough are four days a week or five days. At some point on the fifth day you may actually learn more by having a fifth day to quietly sit at home, reflect and absorb what you learn, read and

- Absorb. Right.

- But certainly, you know, I would've thought it's reasonable to go from one zero to one is good, one to two is probably good, two to three, but at some point you cap out,

- Well we're gonna come back to this question about exactly what, what's the right mix later on in this episode. I think it'll be maybe the last paper I talk about. But it, I think the important point is for many individuals, jobs, organizations, the extremes not the best outcome.

- Exactly. Right.

- And so we're that, that I think is a message that I'm taking from integrating over many studies across many types of workers and organizations.

- So I'll, I'll briefly mention another, there's a paper by Alessandra CIA and Tom Kma, which was called Not incentivize, not incentivized yet Efficient Working from Home in the Public sector. And I'll actually put this in the category of studies on call centers. There's quite a few studies now working from home in call centers. Why is that? It's 'cause they're very easy to measure. I've, you know, visited a lot of call centers and actually effectively managed them in our, when I've been running surveys and they look at a call center in Manchester that works for the police and takes inbound crime calls. So if in Manchester, you know, my sister went to university there and you have a burglary and you ring up, they're the people that take it.

- Okay.

- And they look at their productivity and how many calls they record and that it's, it's a more involved job than simply writing stuff down. They've gotta interview the person and get details. They find that working from home is associated with 12% higher productivity and it's not ours. It's that your more productive, you process calls faster. Quality's the same, interestingly, kind of amazingly that's the same kind of 10% roughly. You know, we found that you'll mention later in other studies I found in China, the basic mechanism of call centers is, it's a repeated thing. So you don't need to be in every day and it's just quieter a home. So it is an activity now that I just see over and over again. It is better done mostly, but perhaps not entirely at home. They also find 4% less sick days. So not surprisingly, you know, there are some people that will keep working if it's at home, but not in the office.

- Right,

- Right. The most interesting thing, and they find, and I also found in the studies I did in China, were that when you let managers choose who works at home and which days for which task productivity goes up 20%. And it's very clear that managers know what stuff's best done at home and what stuff's best done in the office. And so exactly as you say, it's not that everything is best at home or everything is best in the office, there's some mix and giving some choice on the ground tends to improve performance further.

- Right. And maybe who, who can work well at home and who can't. That's another thing managers may have.

- Exactly Right.

- A sense of, yeah. So I think the overall message here is that the, the relationship between work from home and productivity is quite complex. There is no one size fits all approach. There's no simple answer to this question of when it enhances productivity and when it detracts from it. Okay. So that's kind of job performance. Now we had, we had several studies and I think we're gonna talk about three of them on kind of work from home and families. I, I'm gonna briefly summarize two of them that get it. The, the question of how does the, the ability of a parent to work from home affect the educational inputs to the child and the educational outcomes for the child. And so two papers on that. One is titled Work From Home and the Rug Rat Race, the New Geography of Educational Inequality by Francesco Lindsey. And what they, what they do, they're, this is an Amer a study using the American time use survey data. They're doing, they're doing something fairly straightforward but sensible. And just the way the time you survey works is people are a random randomly selected set of Americans are interviewed and asked detailed questions about how you're spending time the day before, like in 10 or 15 minute increments. And so what they find is that people who work from home on those diary survey days, spend more time engaging their child and helping their child do educational activities, helping with the homework, that kind of stuff. It's not a big effect, it's only about 16 minutes a week. But there's reasons to think this, that's, that's an underestimate because when you, when you survey the people yesterday, some of the people who weren't working from home yesterday were working from home some other day of the week. So this is, I think of this number as a, as an underestimate, but it does suggest that parents are more engaged in helping their children learn when they work from home. The other thing that this study finds is that they're more likely to locate or relocate to a neighborhood with high quality schools when they have the ability to work from home when the parent can work from home. And that makes a lot of sense because the ability to work from home gives you more residential location flexibility. And parents of course care about the, the education and the school quality of their kids. So, you know, it's worth noting these results that they find they hold for both college educated parents and for parents who aren't college educated. But of course the opportunities to work from home are much greater for the college educated kids. Hence the reference to inequality in the Title I, I think that's looking at a glass that's 75% full and somehow seeing it is half empty. But the, the bottom line is that that study, and it's a US study suggests working from home facilitates more parental involvement in, in their kids' education and, and more flexibility in school choice. Then there was another paper, a very different setting, very different methods called when parents Work from Home, Pascal ard, McKayley, ett, and Chevalier. What they do is they use administrative data for, for the Netherlands and they exploit the fact that, and I don't remember the details here, but some of these parents are involved in some of have their jobs are involved in collective bargaining negotiations that sometimes abruptly alter whether they can work from home. Okay. And what they find is that when parents go from not being able to work from home part of the time to working from home part of the time that the scores of their children on high stakes educational exams to kind of determine how you get tracked as you, as you progress through the educational system, increase increases. So working from home increases by about one 10th of a standard deviation in the cross section. So that's kind of, it's not an enormous effect, but it's not a trivial effect and it leads to a four percentage point increase in the likelihood that the, that this child qualifies for an academic track rather than a non-academic track. So completely different institutional setting, completely different method. But again, I almost think it's common sense. If you can work from home, you're more likely to take an active role, a more active role in helping your child get educated. That strikes me as a pretty good positive benefit of work from home.

- No, I totally agree. We've talked before and we have some work showing work from home increases fertility and you know, Kate and Cranny presented some of our work at the very conference on this. Yeah. And I think one mechanism, it's obviously easier to look after kids and you're seeing this in action and for every hour saved. I think when we, we surveyed it, you see roughly for every hour saved on commute, roughly half of it you're spending on leisure. So you are, you know, watching, playing games, watching tv I guess I'm showing my age using that phrase, but the other half you're using on what I'd say is more kind of constructive stuff. Like you see working on second jobs, but there's earning extra income household chores and looking after kids. Looking after kids.

- Yeah.

- And you know, from personal experience you must have the same thing. It's not even if you're spending the time with them just being in the house when you have old. So with younger kids, if you've got a 5-year-old

- Making sure they're doing their homework.

- Yeah. And you know, the, the loud music isn't coming out and you know, the str odd smells from your teenager's bedroom and this kind of stuff. So yes, I think there's a kind of direct and indirect effect. I'm not surprised, I was gonna mention a a, a very fun kind of informative paper by an by Arun Ranganathan who it was called the Double Edged of Flexibility task Design and Gendered Focus in Remote Work. And what Aruna did is she collected a lot of data in India on male and female tech workers, including some quite detailed time diaries and looked at what happened when they worked from home versus worked in the office. And you'd probably not be surprised to hear, but you know, maybe horrified, which is when men worked from home, you know, the obvious happened. They gained about 50 minutes of focus time a day. So they found working from home quarter and more peaceful when women worked from home, they lost an average 30 minutes of focus time a day. And she had a series of kind of amazing eye-opening anecdotes of stories of, you know, mothers at home with signs on their door saying, you know, quiet working, please don't in disturb and kids bursting in or in-laws or you know, both the, the both of the spouses are there, there's the delivery at the door and you know, that's the woman is expected to go and pick it up. It kind of reminds me just practically of having to talk to so many employees that the gendered side of work from home goes in both directions. There's some extent there's this sense that as Una says, that workplace is actually in a oasis, a sanctuary of, of kind of quiet for women that they can es escape the noise and chaos at home. On the other hand you also hear people claiming, well actually women want to go home 'cause they're often the primary care workers. And this thing cuts in both direction. And what we've actually seen in US data is work from home levels amongst men and women are very similar, but I think there's powerful forces pushing in different directions. When I've talked to individuals, they've often had very strong views about they very much do want to go into the office to escape home versus others that wanna be home. And Una's data was right on,

- Wasn't didn't Arun also have an anecdote about when the father puts the sign on the door that says do not disturb working, he's left undisturbed for hours on end. There was one story like that. So

- Yeah, exactly. The

- Kids ignore it or some kids ignore it if it's the mother who has the sign on the door, but they're, they respect it if it's a father who has the sign on the door. So yeah, there, there are these differences in the way things play out. That was, that was in India. What, what was the study? Yes, yes. That was okay, just, just to make sure I I, I missed that. Alright, so let, let's let's take up last couple papers and one, this is a paper you and I are co-authors and the our our other co-authors are Che Axo, Victoria Marino and Che Zel. So this is a paper and there's really two papers I need to give a little background to this one where we've been cooperating with a Turkish, a very large Turkish firm called Tempo. They are the largest call center supplier of customer service type customer service, you know, in, in Turkey. So they've got a few thousand employees and, and many work teams with call center agents and supervisors. So they have a very interesting experience since the pandemic. So before the pandemic struck, they had very traditional working arrangements. Everybody came into the office five days a week, they worked eight hour shifts five days a week, there'd be work teams of 10 or 20 agents with a supervisor. There were several locations all in urban centers around Turkey. The pandemic hit in 2020. The government said you've got two weeks to move everybody remote. So every, they went completely a hundred percent remote in two weeks. But everybody personal computers got 'em set up and so on. And in our first study, not the one that was given at the most recent conference that was given a year ago called remote work, employee mix and performance. We had very detailed data at the individual agent level on the calls they were handling, how efficiently they handled them, the quality of their treatment of the customer and so on. And what we found, and I think we were rediscovering and quantifying something, the company had also figured out productivity went up when these people went, started working from home. And it's, it's really the phenomenon you described earlier. The picture of their office is a bunch of people, they don't even have cubicles. They're just crowded next to each other around desks. They're all talking on their phones. It's, you know, you got 20 people in a very small space and then when they're working at home, they got their own little room. It's not, it's not a, it's a not a magnificent setting by any means, but it's quiet. So productivity went up by 10% and the company decided not to go back to the old way of doing things. They stuck with the new arrangement. This is kind of, they were forced to experiment and they found the new arrangement worked better and they also discovered that they were now able to attract high quality applicants from kind of the more rural and interior parts of the country who previously would've found it time prohibitive to commute into the urban centers. So that was the set, that was the first study

- Just to focus that, that big, you know, big finding there was work from home allows you to recruit better people. Right. We've seen this over and over again, particularly more educated people. And that would never make to the central office, but now you let them work from home.

- Exactly. And, and a lot more women in

- Turkey. And the, the wage rate, I think, you know, on numbers, the wage rate was the same and the number of

- People, yeah, there was a national nationally

- And the number of employees with a university degree roughly doubled. Right?

- So they got, they got better employees by kind of standard measures. As a consequence, existing employees also became more productive. There was one downside though, and this is what sets up the second study. Retention rates went down once they moved the fully remote model. And we have survey data that kind of gives an indication of why that is. People felt somewhat detached from the organization. They didn't feel a sense of cohesion. They felt social, socially isolated. So the company says, well, worried about this. We're getting great productivity, we're getting great people, but we can't keep them very long. So we suggested an RCT, unfortunately they went along and the RCT was to say randomized controlled trial. So let's take half of the work teams, agents and supervisors and let's bring them to a central office one day a month. Let's do that for nine months and let's see what happens to productivity, retention, job satisfaction and so on. And what we found, I'll just summarize it here and then you can jump in. Productivity rose again by about 10%. This happened over several months. Retention rates, nine month retention rates rose by about eight percentage points, which is about a 50% reduction in the quit rate. So a big effect there. And in kind of follow up surveys, the employees express a stronger sense of attachment to the organization and the vast majority of them sup would support a continuation of this, of this practice. The last thing we did a, we, we had enough data to do a cost benefit analysis from the company's point of view because the company had to fork out the extra costs associated with people commuting one day a week, one day, one day a month I should say. And on those, on that one day, instead of working an eight hour day, it was more like a six hour day plus a lot of long lunches, long breaks, social socializing type things. So there were real costs for the company. Nonetheless the productivity gains and the, and the savings in, in lower higher retention rates more than covered the cost even within the nine month interval, let alone after the intervention's over. So this is an illustration that again, the corner solutions are not likely to be the best outcomes in many settings. And if you're going to move to something where many of your employees are, are remote, most of the time you have to figure out some other way to engage them and make them feel connected to the organization, have some relationship with their boss and coworkers. So I I thought that was quite an interesting set of findings.

- Yeah, no, I thought it was great. And it matches what you see in the market, which is when you look at firms that are remote first, like Zillow, Airbnb, drop work, Dropbox, Upwork, et cetera, Instacart, they still have employees meet once, once a month. So they have these events, right. And you know, often these companies will have, you know, these are big companies, but it's the same for small companies once a year or twice a year or have a big event and everyone comes in. But once a month, you know, local teams will meet somewhere and it, these are like one day meetups. But exactly the same thing that in fact I visited JetBlue in 2010, their call center. And I remember back then they said, we're fully remote because we like to hire, you know, really good people, but they have to come in one day a month. And it was like exactly this 15 years later. Yeah.

- So you, you had a, I think you had a, a last study you wanted to mention.

- Yeah. I'm gonna quickly mention two actually. Two, okay. I, I I'm gonna, you know, flex that we have a few more. So I'll mention two 'cause they're, they're very different. They're both quite fun. So one is shopping from home by Stephanie Johnson, Scott Baker and Jana Orbovich. And what they've done is they have merged in what's called Nielsen Consumer Panel. So Nielsen has incredibly detailed data from a, it's like five, 10,000 households a month and what they're buying, where they're spending, how much they're spending, what goods they're buying. And they've collected a, a number of surveys on work from home. So they basically combined up work from home is shopping habits. And there's three key findings. One is first two are obvious, the third one is less obvious actually the first one is look, work from home changes, shopping mode. So not surprisingly there's much more online shopping, perhaps not surprisingly, there's much more weekday trips, much less, less weekend trips. And in fact, I remember talking to Sainsbury in the uk, they said pre pandemic Saturday was the busiest day of the week and it's now Friday. And that's, that's the day people are supposedly working, but apparently not. So second finding is it increases total spending. So people are just spending more money on shopping and you can have lots of, you know, reasons why you see they're buying more products, they're buying a wider range of products. They're particularly spending more on food unsurprising 'cause they're cooking and household goods and less on health and beauty. So all those jokes about, you know, deodorant, sales are plummeted are probably true. And then finally there was less obvious, kind of interesting was it increases the prices of paid by consumers. So consumers are shifting towards higher priced items, they are taking less advantage of deals, they're using less coupons. It's not totally obvious why. One

- I wanted to pick up on this last finding because it reminded me of something else. You remember when internet sales first became a thing and there were a set of our colleagues who said, wow, price comparison's going to be easy, competition is going to really erode margins in retail sales.

- Yeah,

- It didn't happen.

- Exactly. - And part of the reason it didn't happen is 'cause it's still, you got, you know, doing the comparisons. But the other reason is, is the online sales actually facilitates a certain form of discrimination across consumer categories. If you're gonna have raspberries on sale and the produce section in the store, then you gotta have the sign there and everybody gets the raspberries. If they're, if you know the buying patterns and you, like a lot of people shop, they just set up, you know, they, they just set up what it is they buy every week, every month online, click a button, they don't have to enter all this stuff. You don't look at the, unless you're really caught, you know, really, really trying to get the best bargains, you don't go look and do all the comparison shopping. So I think this online sales actually facilitates a little bit more price discrimination on the retail side than the old, than the traditional aspect of of in person retail shopping. Which is consistent with what you're finding. It,

- It totally is. The, the most amazing thing about this Yeah, that's absolute consistent is that you also see even when they shop in the store, they're spending more money. And that's a little, so one story of that is I'm working from home. I, it is hard to ex explore, you know, once there is, I'm working from home but I go shopping on a Thursday, I know I've gotta be back in an hour for that zoom call. So I'm fast, I'm rushing through, I'm in work mode. Time is money. I'm charging through the store. I actually ignore your raspberries deal 'cause it's gonna take too long. 'cause they're, you know, they're free. I see, I see. But the, the, the maxis are pretty big. The maxis are at what? The switch to work from home accounts for about 1% higher grocery inflation over the pandemic.

- One percentage point over

- That. Yes.

- Over what period?

- Cumulative from 2019 to 2024. So in fact grocery inflation, well normally it's two and a half, 3% over that period. I dunno it was eight 9%. So it's not a huge overall share. It's maybe a 10th

- Through Twentieths, but it's material.

- Yeah, it, it, it's something. So that was one, the other study I was really interested in was right at the beginning of the conference it was called Remote Work Consumer Cities by two former Stanford students, in fact ISU who presented in Franklin Chiam. And what they did is showed, well look, we all know cities are struggling. City centers may, perhaps not New York, but many city centers are struggling. There's still a lot of empty office buildings. So elite office buildings, what's called kind of class A is doing okay, but outside of that it's struggling and relatively rent and prices and city centers are down relative to the suburbs. But they showed, what's happening is cities are seeing now a revival powered more by consumption than work. So they have incredible safe flight, safe data on tracking cell phones and seeing why people are traveling and seeing a big surge in what they call amenity foot traffic in the city center. So what's going on? People are working from home, but they're going into shop and they're going in often to go out for dinner in the evening. You know, they're getting kind of, you know, tired of being in all day. And this is particularly true for high-end parts of the city. So nicer parts of Central New York, you know, I mentioned this in parks living near San Francisco. San Francisco is seeing a revival. Partly it's powered by ai, but partly it's powered by more people going into, you know, go theater. Well

- They're getting their act together a bit. They're trying, they

- Are getting - Their act together to clean up the streets, make the place a little bit safer.

- Yes, yes,

- Yes. So that it's more fun and you feel more secure to go into the city.

- Yeah, someone said where San Francisco came from, it was hard to get any worse. So yes, you know, the crime, I I they made some, they made some, they fixed some clear policy blunders. But it is part of the bigger, broader theme we're seeing across American cities that people are returning and we had our stuff on long social distancing. People are no longer trying to social distance. They wanna go out, they wanna shop. And they seem to prefer to do that in city centers rather than the suburbs.

- Yeah. So yeah, this is, this is actually a set. Maybe I, some, some city managers, some mayors have figured this out, but others I sometimes wonder if they recognize that the way you, the way to succeed economically is a city now is much less about bringing good jobs into the city and about making the city a safe, enjoyable, fun place to live and

- Exactly.

- And take advantage of urban amenities, entertainment parks and so on. And because people have a lot of residential location flexibility much more now than they did in 2019. And that, that means cities have to compete with other cities in a somewhat different way than they did in the past.

- Totally agree. Exactly right.

- So we, we've actually managed to cover one third of the papers I think that we had at this conference. We will, we'll I'll post a link to all of the, all of the papers, the whole conference website. And as well as we talked about a, a few things we've talked about that came up in other podcasts, including the paper on the power of proximity. So we'll put those links on the website and so on. But it's been fun. Nick and I, I continue to be impressed by the, the volume and the variety of interesting work that is coming out on trying to understand what the, what the full set of consequences are from this really. Revolution's not really, I don't think it's too strong a word for the way we work and also to, at least for some people and, and how we live.

- I think I, I think you're right. I, my sense is this is the biggest change to US labor markets probably since World War ii. So World War ii, what you saw was the start of a long trend towards increased female labor force participation. Men went off to fight, right? They got women into jobs, they found, they did, you know, just the same as men. And so from that point onwards, that was a huge change. This is kind of shock 2.0, which is, hey, work from home works. It ain't perfect. Right? But it has some real upsides and firms of experiment and it's, and it's now here to stay and, and now looking at how it's affecting everything around us in society.

- Exactly. Okay, thanks so much, Nick. It's been great chatting as

- Usual. Yeah, thanks for having me

- On. Take care.