Abstract

The results of early studies on the consequences of the Covid-19 pandemic suggest that the attractiveness of different places of work and of residence will shift persistently. On the one hand, the increasing practice of working from home (WFH) will allow individuals to accept jobs at further distances from their residences. On the other hand, neighborhoods in city centers will lose attractiveness as urban amenities like cultural venues or gastronomy are closed and demand for leisure activities in the countryside increases. Those developments will affect inequalities between and within regions. The radius in which establishments find suitable applicants for their vacancies will increase, as long as they offer the possibility of WFH. This could foster productivity of plants in rural areas and lead to convergence. By contrast, the exodus of high-income households from city centers will cause divergence within regions. Increasing segregation would have negative implications for labor market outcomes of young citizens who enter the labor market during or after the pandemic. In this project, we aim to study how those trends affect the structure of regional labor markets. We start by analyzing how the increased practice of WFH differs between regions, industries, and occupations. We will then examine how this changes residential preferences and commuting behavior of employees. Next, we will analyze whether the enlargement of the scale of regional labor markets has positive effects on plant productivity and if this leads to convergence. In another working package, we will study whether there is increasing segregation within cities and how this affects labor market outcomes, especially of young citizens.