Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/267233 
Year of Publication: 
2022
Series/Report no.: 
CESifo Working Paper No. 10000
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We estimate the impact of Covid-induced working from home (WFH) on offline consumer spending in urban agglomerations. Our analysis draws on postcode-level data on card transactions and WFH patterns in major German cities between January 2019 and May 2022. We address endogeneity in WFH uptake by estimating intention-to-treat effects based on "untapped WFH potential", i.e. the share of employees with a teleworkable job who did not WFH pre-pandemic. This measure approximates the local scope to expand WFH and explains both observed WFH growth during the pandemic as well as prospective employer plans and employee desires. Difference-in-differences estimates show that local spending increases by 2–3 percent per standard deviation higher untapped WFH potential. The effects are only significant in non-lockdown periods and after Covid restrictions are permanently lifted. Null effects during lockdowns are consistent with temporary shifts toward online spending when business closures preclude regional relocation of offline consumption.
Subjects: 
Covid-19
geography of consumption
consumer spending
work from home
Germany
JEL: 
D10
E20
G20
J00
Document Type: 
Working Paper
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