labor markets look extremely tight by some measures (Hilsenrath and Cambon, 2021). The JOLTS
measure of the job openings rate is near historic highs.
Returning to the SWAA for systematic evidence, Figure 3 summarizes the evolution of
worker desires and employer plans for working from home after the pandemic ends. Both workers
and employers have warmed to the idea of working from home since the onset of the pandemic.
Throughout the period since May 2020, workers say they would like to continue working from
home more than two days per week, on average, after the pandemic is over. In recent months, they
say they would like to work from home almost half-time (2.4 days per week) in the post-pandemic
economy. These statistics resonate with our findings in Figures 1 and 2 that many workers are
willing to quit or seek a job with flexible working job before returning to full-time in-person work.
Employers plan for only about half as much working from home as workers want. As of
June 2021, employers are telling their employees to plan for about 1.2 days per week of working
from home in the post-pandemic economy. As Figure 3 shows, employer plans for the extent of
working from home have risen 23% over the past year – from 1.0 days per week in July 2020 to
1.23 days in June 2021. Much of this upward drift took place during the first half of 2021, as the
US economy reopened and labor markets tightened. While adverse selection concerns discouraged
remote work before the pandemic (Emanuel and Harrington, 2021), Figure 3 suggests much of the
COVID-driven shift to working from home will persist long after the pandemic recedes. Moreover,
these employer plans suggest firms are weighing the costs and benefits of working from home and
settling on a middle ground, as suggested by Behrens, Kichko, and Thisse (2021).
Our results help understand the historically high level of quits and job openings
experienced in the U.S. economy in recent months. Labor market tightness, spatial mismatch, and
skill mismatch may all contribute, but there’s another driving force as well. In particular, many
workers and employers have discovered that working from home works better than anticipated, as
we document in Barrero, Bloom and Davis (2021). That’s led to new-found desires to continue
working remotely after the pandemic ends. Some employers are willing and able to accommodate
those desires, and some are not. As a result, many workers are re-sorting across employers and
into jobs that better suit their preferences over working arrangements. As that process plays out, it
will push up quit rates. It will also drive high job opening rates, as employers contend with the
need for a higher-than-normal pace of replacement hires.