The City Paradox: Skilled Services and Remote Work

Fabian Eckert, Sharat Ganapati and Conor Walsh

No 43, Opportunity and Inclusive Growth Institute Working Papers from Federal Reserve Bank of Minneapolis

Abstract: Large cities in the US are the most expensive places to live. Paradoxically, this cost is paid disproportionately by workers who could work remotely, and live anywhere. The greater potential for remote work in large cities is mostly accounted for by their specialization in skill- and information-intensive service industries. We highlight that this specialization makes these cities vulnerable to remote work shocks. When high-skill workers begin to work from home or leave the city altogether, they withdraw spending from local consumer service industries that rely heavily on their demand. As a result, low-skill service workers in big cities bore most of the recent pandemic’s economic impact.

Keywords: Remote work; High-skill services; Technological change (search for similar items in EconPapers)
JEL-codes: O33 R11 R12 (search for similar items in EconPapers)
Pages: 17
Date: 2020-12-03
New Economics Papers: this item is included in nep-geo and nep-ure
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Citations: View citations in EconPapers (23)

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Working Paper: The City Paradox: Skilled Services and Remote Work (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmoi:89240

DOI: 10.21034/iwp.43

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