The Donut Effect: How work-from-home impacts migration patterns and real estate markets

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Abstract/Contents

Abstract: I measure the effect of Covid-19 on migration flows and real estate markets within and across US cities. Using near real-time data from Zillow and the US Postal Service, I establish three key results. First, both households and businesses reallocate away from zip codes that are close to a city’s center, have a high share of residents who can work-from-home (WFH), or have high density. Second, this reallocation occurs across many cities when measured with rental rates, but only holds for “superstar” cities when measured through property prices. Third, the within-metro reallocation from city centers to their suburbs is stronger than the between-metro reallocation from dense metros to sparse metros. I rationalize these findings by building a simple spatial equilibrium model where hybrid WFH, as opposed to full-time WFH, generates qualitative predictions that match the empirical patterns. My results suggest that Covid- induced WFH has led to a persistent shift in the spatial allocation of labor.

Type of resource	text
Date created	May 2021

Subject	Stanford University Department of Economics
Subject	COVID
Subject	working-from-home
Subject	real-estate
Subject	migration
Subject	future-of-work
Genre	Thesis

Related Publication	Ramani, Arjun and Nicholas Bloom (2021). "The Donut Effect of Covid-19 on Cities." NBER Working Paper No. w28876.
Related Publication	Ramani, Arjun, and Nick Bloom (2021). "The Donut Effect: How COVID-19 Shapes Real Estate." SIEPR Policy Brief, January.
Related item	Title The doughnut effect of COVID-19 on cities
Location	https://purl.stanford.edu/kq047bj9205

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Preferred Citation: Ramani, Arjun (2021). The Donut Effect: How work-from-home impacts migration patterns and real estate markets. Stanford Digital Repository. Available at: https://purl.stanford.edu/kq047bj9205

Stanford University, Department of Economics, Honors Theses

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