The Economic Impact of Remote Work: Unpacking Regional Transformations and Economic Multipliers
The emergence of remote work has ushered in a transformative era of economic change, profoundly altering the dynamics of regional economies and extending its impact nationwide. This abstract explores the profound implications of remote work on local economies, focusing on the operation of the multiplier effect within a country's economic framework. The multiplier effect is a fundamental economic principle that elucidates how changes in expenditure and investment can trigger a ripple effect, magnifying their influence on an economy. In the context of remote work, this concept gains heightened relevance as it sets in motion a cascade of economic activities originating from remote employees and radiating to their local communities. The increased flexibility and reduced geographical constraints associated with remote work have reshaped resource distribution, potentially diminishing the demand for commercial real estate in urban hubs and necessitating adaptable urban design strategies. In summary, the advent of remote work has instigated a paradigm shift in regional economies, propelled by the multiplier effect, which fosters job diversity, innovation, and infrastructure development within communities by amplifying the impact of spending and investment.
The ongoing transformation of work and life due to remote work necessitates a comprehensive understanding of its amplifying impact, bearing significant importance for policymakers, businesses, and local communities. The multiplier effect, a cornerstone of economics, underscores how alterations in expenditure can trigger substantial repercussions in a country's economy through a cascade of economic operations, offering lasting influence rather than a transient effect, although it can also operate negatively when expenditure decreases, leading to a decline in both economic activity and income. This concept highlights the interconnectedness of economic activity and underscores the significance of changes in spending patterns for a nation's overall economic well-being. The magnitude of the multiplier effect is shaped by factors such as the marginal propensity to consume, leakages like savings and taxes, and the extent to which additional spending drives additional production capacity within the economy. A comprehensive understanding of the multiplier effect is invaluable for policymakers, enabling them to assess the potential outcomes of adjustments in fiscal and monetary policies.
Annamalah, S., Paraman, P. 2023. The economic impact of remote work: Unpacking regional transformations and economic multipliers. Journal of Applied Economic Sciences, Volume XV, Fall 3(81): 160 – 168. https://doi.org/10.14505/jaes.v15.3(81).03
Article’s history:
Received 1st of August, 2023; Received in revised form 27th of August, 2023; Accepted 10th of September, 2023; Available online: 27th of September, 2023. Published 30th of September, 2023 as article in the Volume XVIII, Fall, Issue 3(81).
Copyright© 2023 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.
[1] Adisa, T. A., Ogbonnaya, C., and Adekoya, O. D. (2023). Remote working and employee engagement: a qualitative study of British workers during the pandemic. Information Technology & People, 36(5), 1835-1850. https://doi.org/10.1108/ITP-12-2020-0850
[2] Alekseev, G., Amer, S., Gopal, M., Kuchler, T., Schneider, J. W., Stroebel, J., and Wernerfelt, N. (2023). The effects of COVID-19 on US small businesses: Evidence from owners, managers, and employees. Management Science, 69(1), 7-24. https://doi.org/10.1287/mnsc.2022.4327
[3] Benetton, M., Compiani, G., and Morse, A. (2023). When cryptomining comes to town: High electricity-use spillovers to the local economy No. w31312. National Bureau of Economic Research. http://www.nber.org/papers/w31312
[4] Brandao-Roll, J., De Ridder, M., Hannon, S. M., and Pfajfar, D. (2020). The multiplier effect of education expenditures. FEDS Working Paper No. 2020-58, http://dx.doi.org/10.17016/FEDS.2020.058
[5] de Laat, K. (2023). Remote work and post-bureaucracy: Unintended consequences of work design for gender inequality. ILR Review, 76(1), 135-159. https://doi.org/10.1177/00197939221076134
[6] Green, A. (2023). Academic library employees and their work modality options and preferences. The Journal of Academic Librarianship, 49(5), 102764. https://doi.org/10.1016/j.acalib.2023.102764
[7] Gupta, H., Kabra, M., Patwari, N. D., Prashanth, H. C., and Rao, M. (2023). Design and evaluation of multipliers for hardware accelerated on-chip EdDSA. In 2023 24th International Symposium on Quality Electronic Design (ISQED), pp. 1-9. IEEE. https://doi.org/10.1109/ISQED57927.2023.10129381
[8] Johnson, D. A., Wheeler, R., and Lambert, J. H. (2023). Risk description augmenting a business process model. In 2023. IEEE International Systems Conference (SysCon) pp. 1-7. IEEE. https://doi.org/110.1109/SysCon53073.2023.10131196
[9] Li, Y., Goel, S., and Williams, K. (2023). Impact of remote audit on audit quality, audit efficiency, and auditors' job satisfaction. International Journal of Auditing, 27(2-3), 130-149. https://doi.org/10.1111/ijau.12306
[10] Marcus, J. S. (2023). COVID-19 and the shift to remote work. In beyond the pandemic? Exploring the impact of COVID-19 on Telecommunications and the Internet, Emerald Publishing Limited, 71-102. https://doi.org/10.1108/978-1-80262-049-820231003
[11] Matias, A. B., Falcão, M. T. C., Grosseman, S., Germani, A. C. C. G., and Silva, A. T. C. D. (2023). The COVID-19 pandemic and teachers’ work: Perceptions of teachers from a public university in the state of São Paulo, Brazil. Ciência & Saúde Coletiva, 28, 537-546. https://doi.org/10.1590/1413-81232023282.11972022
[12] Pariès, M. D., Müller, G., and Papadopoulou, N. (2023). Fiscal multipliers within the euro area in the context of sovereign risk and bank fragility. Economic Modelling, 106411. https://doi.org/10.1016/j.econmod.2023.106411
[13] Penikas, H. (2023). Money multiplier under Basel capital ratio regulation: implications for counter-COVID-19 stimulus. Journal of Sustainable Finance & Investment, 13(1), 431-449. https://doi.org/10.1080/20430795.2021.1945348
[14] Shahini, L., and Grabova, P. (2023). Economic role of government budget revision in the presence of COVID-19. Economies, 11(4), 118. https://doi.org/10.3390/economies11040118
[15] Sahut, J. M., and Lissillour, R. (2023). The adoption of remote work platforms after the Covid-19 lockdown: New approach, new evidence. Journal of Business Research, 154, 113345. https://doi.org/10.1016/j.jbusres.2022.113345
[16] Van Nieuwerburgh, S. (2023). The remote work revolution: Impact on real estate values and the urban environment: 2023 AREUEA Presidential Address. Real Estate Economics, 51(1), 7-48. https://doi.org/10.1111/1540-6229.12422
[17] Zhang, Y., Ma, G., Tian, Y., and Dong, Q. (2023). Nonlinear effect of digital economy on urban–rural consumption gap: Evidence from a dynamic panel threshold analysis. Sustainability, 15(8), 6880. https://doi.org/10.3390/su15086880