21st century economic development: Telework and its impact on local income

Abstract

Telework, or telecommuting, is gaining increasing attention at the national level. However, the impact it has on local economies is not well understood. Theoretically, teleworking may result in higher levels of worker satisfaction and productivity, which in turn leads to increased income levels. In an effort to contribute to this important topic, this paper analyses census‐tract level work from home statistics from the 2011–2015 American Community Survey. Results from a maximum likelihood regression using a spatial Durbin error model (SDEM) indicate that after controlling for various factors such as employment by industry, educational attainment, and broadband availability, the percentage of residents working from home in both salaried and self‐employed jobs had a positive and significant impact on median household income. Importantly, spillovers from levels of telework in neighbouring communities are also shown to exist, although the direction of impact differs by worker category. The implications of this research support the need to modify current economic and workforce development policies to better nurture, attract, and retain teleworkers. A series of policy recommendations are discussed to help jumpstart this process.

Employees’ Job Satisfaction and Performance through working from Home during the Pandemic Lockdown

“…So long as the Covid-19 pandemic persists, working from home to lessen people's mobility is the best option for all organizations. In doing so, it is expected that teleworking will result in higher levels of worker satisfaction and productivity, leading to increased income levels (Gallardo & Whitacre, 2018), hence continuing to impact local economies.…”

The Digital Citizen

“…While there is renewed interest and support for remote working hubs and telecenters in rural communities as a result of COVID-19 (Tomaz et al, 2021;Department of Rural and Community Development, 2021), they are not necessarily predicated on digital strategies. Gallardo and Whitacre (2018) note the lack of research examining the impact that remote work has on local economic indicators such as income. They theorise that if remote working leads to higher levels of worker satisfaction and productivity, these outcomes should in turn lead to higher levels of income.…”

Telework: Before and after COVID-19

“…Some older studies present teleworking as a flexible way of working that involves the accomplishment of a wide range of remote work activities, electronic information processing, and using telecommunications to maintain the employer-employee relationship while performing full-time or part-time work [20,21]. Authors use terms such as "telework," "telecommuting," or "remote work," which generally refer to lucrative activities or work tasks carried out outside the office, either at home or elsewhere, and relying on new technologies [22][23][24][25].…”