Skip to main content
About HEC About HEC
Summer School Summer School
Faculty & Research Faculty & Research
Master’s programs Master’s programs
Bachelor Programs Bachelor Programs
MBA Programs MBA Programs
PhD Program PhD Program
Executive Education Executive Education
HEC Online HEC Online
About HEC
Overview Overview
Who
We Are
Who
We Are
Egalité des chances Egalité des chances
HEC Talents HEC Talents
International International
Sustainability Sustainability
Diversity
& Inclusion
Diversity
& Inclusion
The HEC
Foundation
The HEC
Foundation
Campus life Campus life
Activity Reports Activity Reports
Summer School
Youth Programs Youth Programs
Summer programs Summer programs
Online Programs Online Programs
Faculty & Research
Overview Overview
Faculty Directory Faculty Directory
Departments Departments
Centers Centers
Chairs Chairs
Grants Grants
Knowledge@HEC Knowledge@HEC
Master’s programs
Master in
Management
Master in
Management
Master's
Programs
Master's
Programs
Double Degree
Programs
Double Degree
Programs
Bachelor
Programs
Bachelor
Programs
Summer
Programs
Summer
Programs
Exchange
students
Exchange
students
Student
Life
Student
Life
Our
Difference
Our
Difference
Bachelor Programs
Overview Overview
Course content Course content
Admissions Admissions
Fees and Financing Fees and Financing
MBA Programs
MBA MBA
Executive MBA Executive MBA
TRIUM EMBA TRIUM EMBA
PhD Program
Overview Overview
HEC Difference HEC Difference
Program details Program details
Research areas Research areas
HEC Community HEC Community
Placement Placement
Job Market Job Market
Admissions Admissions
Financing Financing
FAQ FAQ
Executive Education
Home Home
About us About us
Management topics Management topics
Open Programs Open Programs
Custom Programs Custom Programs
Events/News Events/News
Contacts Contacts
HEC Online
Overview Overview
Executive programs Executive programs
MOOCs MOOCs
Summer Programs Summer Programs
Youth programs Youth programs
Instant

How Remote Work Can Make Geographical Disparities Worse

Economics
Published on:

The COVID-19 pandemic has led to a very significant use of teleworking in some occupations. But due to different employment composition, telework opportunities are greater in large cities compared to small cities. Social distancing measures therefore may lead to a re-examination of geographical disparities. While teleworking allows many jobs in larger cities to be adapted more easily in the short term to new circumstances, it can also lead to moving some of such jobs away from these cities in the longer term.

woman typing on her computer at home - ©kerkezz / Adobe Stock

©kerkezz / Adobe Stock

In response to the COVID-19 outbreak and the resulting confinements, telework has been used extensively in many countries. However, it has been noted that it is not uniform across different occupations: economists Jonathan Dingel and Brent Neiman1  have shown that higher-skilled workers can telework more. This difference may have consequences in terms of inequality: those with jobs requiring less skills are less prone to telework and are likely to be more vulnerable: they would be furloughed or fired if they cannot exercise their tasks.

 

This difference in “teleworkability” depending on qualifications also has implications on employment geography.

 

However, this difference in “teleworkability” depending on qualifications also has implications on employment geography in a country such as France and these implications may be able to reawaken the geographical cleavages that France has experienced in recent years.

Using Dingel and Neiman's measures of telework capability by job type, we were able to calculate the predicted share of positions that could allow for teleworking for each French agglomeration (Figure 1) of over 50,000 inhabitants. While this proportion is around 40% on average for cities with more than 500,000 inhabitants, or even 50% for the Paris area, it hardly exceeds 30% for cities with 100,000 inhabitants.

 

telework graph

Figure 1: share of jobs potentially tele-workable as a function of city size (log-scale) 


The implication of this different exposure is that larger cities are more likely to adapt to confinement and potentially persisting social distancing measures afterwards. In contrast, smaller cities are less likely to adjust and, among other adverse consequences, unemployment there is likely to increase more sharply as government furloughing schemes run out in the next months.

 

Smaller cities are less likely to adjust and unemployment there is likely to increase more sharply as government furloughing schemes run out in the next months.

 

Thus, the ability to telework is likely to contribute to the exacerbation of geographical disparities between small and larger cities. These had been at the heart of the debates to understand the mobilisation of "gilets jaunes". 

Notably, the different exposure to telework is already a result of these geographical cleavages. Larger cities telework mainly because they are richer in high-skilled jobs. In fact, these large cities have become significantly richer in skilled jobs over the past decades. For example, Paris saw the percentage of managers and engineers (“cadres”) in total employment increase from 23% to 36% between 1994 and 2015. This divergence of large cities from the rest of France was due to the arrival of new technologies and the greater possibility to displace or destroy less qualified jobs in these large cities2

 

If the possibility of teleworking allows workers with skilled jobs to better cope with the short-term turbulences linked to the COVID-19 pandemic, it can also backfire in the longer term.

 

But, paradoxically, if the possibility of teleworking allows workers with skilled jobs to better cope with the short-term turbulences linked to the COVID-19 pandemic, it can also backfire in the longer term. If firms have successful telework experiences - that is, small losses of productivity related with working from afar, they may conclude that some jobs no longer need to be kept in larger cities and can be relocated, even abroad. Therefore, the same factors that led to skilled employment growth in large cities may now lead to the relocation, devaluation or elimination of at least some of these jobs, those for which physical presence or ideas exchange is less necessary.

 

1"How Many Jobs Can be Done at Home?" (on VoxEU); "Covid Economics: Vetted and Real-Time Papers" (on CEPR), 5 April 2020

2See Donald R. Davis, Eric Mengus, Tomasz K. Michalski, 2020, “Labor Market Polarization and the Great Divergence: Theory and Evidence” NBER working paper 26955. See the non-technical summary on VoxEU.

Related content on Economics

Subscribe button for Knowledhe@HEC newsletter

Newsletter knowledge

A monthly brief in your email box and 3 issues of the book per year.

follow us

Insights @HECParis School of #Management

Follow Us

Support Research

Our articles are produced thanks to our reader's support