Remote working and the new geography of local service spending

Abstract

Remote working has rapidly become the new norm in many sectors, at least some of the time. Remote working changes where workers spend much of their time and the geographical location of demand, particularly for local personal services (LPS). Our main contribution is to systematically quantify this change for England and Wales using a new nationally representative survey of nearly 35,000 working-age adults, which captures (pre-pandemic) LPS spending while at work and permanent changes in remote working. On average, our work shows that neighbourhoods where people commute 20% less often experience a decline in LPS spending of 5%. There is a clear geographic pattern (the ‘donut’ effect) to these spending changes, but our granular analysis shows that they are uneven: large decreases in LPS demand are concentrated in a small number of city-centre neighbourhoods, while increases in LPS demand around the periphery are more dispersed. Further analysis of neighbourhoods by geographical and sociodemographic characteristics shows that the least affluent are most likely to benefit the least from remote work, increasing inequality.