Work-from-Home, Relocation, and Shadow Effects: Evidence from Sweden

Steven Bond-Smith, Working Papers

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In this paper, we explore some little-known, but significant, economic geography features of the work-from-home (WFH) revolution. The increased practice of work from home following the pandemic has prompted a redistribution of working populations between urban and rural locations. Using a uniquely detailed and comprehensive individual-level nationwide Swedish micro-dataset, we analyze shifts in commuting distances pre- and post-pandemic and explore the association between teleworkability and changes in these distances. Teleworkability alone does not significantly influence the distance between home and work municipalities, yet we observe heterogeneity in the responses. As well as the widely-documented centrifugal ‘donut’-type spread effects localized within cities, our empirical work demonstrates that the work-from-home revolution also engenders a significant centripetal spatial ‘pull’ effect of large cities, as their hinterland shadow effects are magnified by the work-from-home revolution. This latter effect, which encourages workers to locate closer to the metropolitan areas, has not previously been seen or understood.