While working from home is unlikely to be as widespread as many thought at the peak of the pandemic, it is undoubtedly going to play a bigger role than was the case pre-Covid. Research from the London School of Economics suggests that it might not be as widespread as we think, however, in large part because many of the studies into working from home have centered on big cities.

Despite much talk of vast swathes of the workforce working remotely during the pandemic, analysis of Italian data suggests that just 12% were able to do so during the peak of the pandemic in 2020. This is some way short of estimates suggesting almost half were doing so.

Significant overestimation

As a result, the researchers believe that current estimates significantly overestimate the number of people working from home by at least 50%. Of course, there was still a huge surge in remote working as a result of the pandemic, with data from the first lockdown in Italy showing that 1.5 million people worked remotely, up from around 200,000 before the pandemic.

The researchers believe that similar disparities existed in the United States, where commuting data suggests that around 17% of the workforce worked remotely during 2021, which, while significant, is some way below the estimates of around 40% that commonly appeared in public debates on the topic.

They argue that the gap between potentially working from home and actually doing so is dependent on a number of factors:

• The technological infrastructure within the organization to support remote working
• The managerial mindset and culture towards remote working
• The technological infrastructure in the employee’s community to support remote working

The external environment

The Italian data highlights the clear regional and organizational differences in terms of working from home. For instance, larger and more productive firms were far more likely to have people working from home than their smaller peers. Indeed, just 1% of firms with less than 10 employees had any kind of work from home policy.

Similar differences appeared on a regional basis as well, with over 21% of employees in Lombardy and Lazio able to work from home during the lockdown, compared to just 2% in regions like Sicily and Puglia in the south of the country. This was in large part due to the different industrial makeup of these regions, but even after accounting for sectoral differences, the data shows a clear gap between potential and actual levels of working from home.

This gap is largely explained by the lower levels of technological capability coupled with the lack of economic dynamism in these regions. The researchers believe it casts doubt on the ability of remote work to “level up” regions that have previously lagged behind economically.

Similar regional variations exist in the United States, where just 14% of the population lives in an area where remote work represents more than 25% of the total. This is most common in larger cities, with peripheral regions having pretty low levels of adoption. This was emphasized by a recent study from the University of Oxford, which found that a digital nomad lifestyle is only really possible in large cities.

Urban focus

The research examined the use of online labor platforms, such as UpWork and Fiverr, and found that they tend to mirror the broad polarization of labor markets according to both skills and geography. What didn’t emerge was a more even distribution of work. This meant that work was most likely to go to people who live in both a developed country and also a cosmopolitan city within that country.

As such, while there are no longer any real technical barriers to working from anywhere, there remain economic-institutional barriers that result in the remote labor market being heavily polarized between countries and regions within countries. What’s more, the researchers also identified significant differences between job types.

“Countries are globally divided: North American, European, and South Asian remote platform workers attract most jobs, while many Global South countries participate only marginally….remote jobs are pulled to large cities; rural areas fall behind,” the authors write.

As such, it’s clear that the potential for remote work is firstly not quite as popular as it was previously perceived, and is secondly, not distributed evenly across society. It’s therefore unlikely to offer smaller towns and rural areas the chance to “level up” that was previously hoped for.