Working from home may not be the cost-saving measure that it first appears to be.
According to a new working paper from Harvard University researchers, where a remote-worker resides dictates whether or not working from home saves a household any money.
At the start of the COVID-19 pandemic, a closed economy meant many people were able to work from home. The move has been hailed as a success by many corporations and employees, but Harvard wasn’t so sure.
To determine whether people and businesses are better off with employees working from home, Harvard compared how much households with remote workers spent compared with their peers who commuted to work prior to the COVID-19 pandemic.
On average, households with remote workers spend 7 percent more on housing than homes where people commute to work, the report said.
“Analysis shows that the increased cost of housing needed to support remote working will offset a significant portion of any savings on commercial real estate from remote work,” the report said.
The reason for this is that remote workers were more likely to live in larger dwellings with a higher price per room rate. Larger dwellings with reliable internet and communication channels are often required to work from home.
“When we conduct analysis within commuting zones … remote households are actually found to have located in areas with slightly higher than average home prices compared to non-remote households,” the report stated.
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