Myths and truths: How remote work is redefining our lives
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In this episode, Nick Bloom, the William Eberle Professor of Economics at Stanford and one of the world's leading experts on work-from-home, joins host Neale Mahoney, the Trione Director of SIEPR, to talk about how remote work is changing the labor market, housing, the economy and leisure — from golf and dinners out, to city centers and suburbs, to concerns about productivity.
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The conversation looks past the headlines to what the data actually tells us about the new world of work. Along the way, we explore several key themes, including:
(01:05) The current state of work from home
(05:35) WFH: Businesses and employees
(12:35) The peripheral effects of remote work (Golf, anyone?)
(20:27) The future of work and technology
To learn more about Bloom and his insights, check his bio and extensive research on work-from-home, productivity, and organizational change. For additional context on WFH, check these links:
- The Evolution of Working from Home
- Hybrid work is a “win-win-win” for companies, workers, study finds
- The donut effect: How COVID-19 shapes real estate
TRANSCRIPT
Econ To Go: Episode 01
Neale Mahoney: When the COVID-19 pandemic plunged millions of us into remote work, we unwittingly became part of a giant experiment. Back then, Stanford Economist Nick Bloom, was already an expert on remote work and for him the pandemic offered a remarkable learning opportunity.
Nick Bloom: I think what surprised me the most is that it worked in 2020. So like even I, that was a fan of work from home, I'd done a TEDx talk, I'd met Obama in 2013 to talk about it. I was still like thinking in, yeah, April, 2020, this ain't gonna end well.
Neale Mahoney: I'm Neale Mahoney, Economist and Director of the Stanford Institute for Economic Policy Research. In this episode of "Econ to Go," I chat with Nick Bloom over coffee on the Stanford University campus. We dive into the myriad ways that work from home has changed our lives, from how it's affecting where we live, to how it's shifting when we work out and play to its impact on firms and profitability and what to expect in 10 years. Alright, so let's start with the big picture. What is the state of work from home today?
Nick Bloom: Maybe an analogy to work from home would be, you know, the big asteroid that wiped out the dinosaurs. There was a before, a during, and an after. And so if I think of work from home, before, we have data going back to the '60s, it was rising actually very fast just from a very low level. So amazingly work from home is doubling roughly every 10 to 15 years 'cause the technology was getting better. So, you know, I talked to my mom who worked from home a lot in the '80s and she said even phone calls were expensive, there are no computers. And then during the pandemic it surged. So about 60% of Americans are working from home, which was like incredible. Probably most people listening were at home in April, 2020. And now it's down to about a quarter of time. So roughly 25% of days are from home in the US and it looks like that's kinda stuck. So that's been stable. And where's that come from? Roughly half of Americans work from home roughly half the time.
Neale Mahoney: What are the biggest myths or misconceptions about work from home?
Nick Bloom: I think a big misperception is still there's a bunch of people just goofing off. You know, the old saying used to be the three great enemies of work from home are the bed, the fridge and the television. And you know, like I think there still a lot of execs have that view. It turns out in the research, and I have a paper in "Nature" came out in 2024, hybrid, so coming in three days a week, working from home two, productivity's about the same as coming in all five days. So you know, misperception I'm gonna throw out the window that if you work from home a couple of days a week, it's damaging for productivity. We don't typically see that.
Neale Mahoney: What are some predictions that we made along the way that didn't pan out?
Nick Bloom: There were two, I don't know if you remember but in March, late March, early April, 2020, people were terrified about a security disaster. I remember talking to lots of organizations like all these laptops going home like you know, people are- there's gonna be a mass hack fest Turned out never really happened. If you think back, we just didn't see any news about mass hacking, you know, no more than normal anyway. So that was one thing that never happened. The other thing that never came to pass was there was this view that people would, if they could work from home they'd change their time schedule. You saw a bit of it in you know, 2020, you were getting emails all times of the day and night. But what we see in 2025 is people that are working from home basically keep the same schedule as they do in the office. So they generally start work at 9:00, they stop for lunch. Interestingly they have shorter lunch breaks. I have evidence showing people working from home have a lot shorter lunch breaks on average is about 15 minutes versus 45 in the office. You can imagine the office, they take less breaks but people basically when they're working from home, they just still stick with the working day. And I think the reason is they have kids or spouses or other people they have to connect to they're on the same schedule.
Neale Mahoney: No, the shorter distance of the fridge is a double-edged sword, right? Like you can go to the fridge more often but like you can go there and get back with more quickly.
Nick Bloom: I mean it's interesting you haven't seen any massive health effects of work from home. Again, other predictions I saw very negative and positive. There's the negative on the fridge. So people- You know there's a lot of studies actually some in Europe where you look at mandatory retirement ages. So in Germany I think it was 65 and you see a big spike up in mortality rates after retirement 'cause work oddly tends to be good for health, maybe being away from the fridge, forced to get it out. There are other folks saying well you can go to the gym. And it seems like net net they kind of canceled out and we're not seeing any net effects on health effects.
Neale Mahoney: As remote work evolves, there's still more forecasting to do. At a Stanford cafe, Nick sheds light on the questions executives are thinking about in this shifting landscape. So pandemic comes and suddenly like work from home is like one of the main conversation topics. Like how has the research progressed since then?
Nick Bloom: Early on, if I just think of the eras in like 2020, there was like is it gonna stay? I actually in 2020/21 I had an enormous number of conversations with CEOs, boards, C-suites, like really high level like is it gonna stay? Should we plan for it? And then the answer then was yes, but it's gonna probably stay part-time like hybrid. Now in 2025/26, what we're seeing is discussions around are we gonna fully go back to the office. There the answer again is like no, I know there's a few, you know, well known companies that call people back. Mostly just to give you one number, if you look at the Fortune 500, so the biggest, most successful companies in America, 70% of them are hybrid for managers and professionals. So like our employer, your organization, SIEPR they're all basically hybrid 'cause you don't need everyone in all five days.
Neale Mahoney: You've written about the great mismatch between what workers want and what firms are offering. Can you explain i
Nick Bloom: It's not enormous, but when you poll employees, they typically wanna work from home on average about three days a week, come into the office two. That I have to say varies a lot but on average individuals like us wanna work from home typically three. If you look at what firms are offering, it's on average about two, maybe 1.82. So there's about one day a week mismatch. And you know, I think that will stay, like employees don't wanna work as many hours, they wanna get paid more money. It doesn't mean firms have to give it to them but just to be clear, what employees want and what firms are offering is not quite met in the middle.
Neale Mahoney: And like I could think about lots of stories for this. Like one is there's a real productivity effect and firms want people in the office more 'cause they're more productive. It could also just be the executives and managers like don't understand how difficult things are for early career employees with young kids. They don't remember that. Or perhaps they were in households where they didn't have to do all of that housework. Like what's explaining this mismatch?
Nick Bloom: That is a really interesting question. So I think a lot of it is, as you say, and you see there are multiple studies that show executives valuation of their own personal valuation. In fact somewhat more only their projection of what they think other peoples want on work from home is less than what other people actually want. And I think part of it's memory. So the classic CEO is probably, if you look, you know the big firm CEO is probably mid fifties, probably male, probably doesn't have any kids in the house anymore. So you know, they have to remember a while back. I think the other thing is what I call selection effects. So there are some people that are just super ambitious, super driving, you know, if I'm gonna remember them, they thought they're gonna make it from age 10. Those people often end up as CEO.
Neale Mahoney: I mean the people who are at the top ranks of firms like don't like leisure as much as the rest of us.
Nick Bloom: Exactly right.
Neale Mahoney: So it's hard for them to relate to people who like leisure.
Nick Bloom: So I think that's a big issue. And I talked to execs, you know, and some of them are a bit more empathetic and get it. So I mentioned this paper in "Nature" in 2024. On that we did an experiment for one firm called trip.com, they're worth about 50 billion dollars. They're NASDAQ listed they were, they have 40,000 employees, they're a big for profit company. They experimented, they did a huge randomized control trial on work from home where they randomized whether you came in three days a week or five. What they found is there was no effect on productivity. These were for people in marketing, accounting, financing, computer engineering. But quit rates went down by a third. And when they did the numbers they said hybrid is phenomenally profitable because while productivity's unchanged, every person that quits costs us $50,000. They said if someone quits you've gotta gonna go out, re-advertise, re-interview, re get up to speed. And so they said the one third reduction in quits we saw in the hybrid group meant if we rolled it out to the whole firm it would increase profits by about 50 million a year. So my take is, CEOs often get it wrong, but ultimately what's gonna win in a capitalist economy is gonna be the fact that hybrid's profit- I often say to activists, if you like work from home, capitalism is your friend. Like capitalism is, you know, supporting hybrid 'cause it makes companies money 'cause it reduces expensive turnover.
Neale Mahoney: I guess the flip side of this is if you want to increase your quit rates, you might switch to five days work from office.
Nick Bloom: You are exact- So as probably people are aware, there are a bunch of companies, you know Amazon is the most high profile, but Instagram, Dell, the federal government that have called for a five day return to office. In many of these cases, they- it's part of a headcount reduction. So take Amazon, that's a good case to look at. Andrew Jassy, September 2024, has this memo that comes out and says "We are ending work from home. You've gotta come in five days a week." And it goes on to have some kinda wishy-washy stuff about we're better together, we need to be here, blah blah blah. But then the memo talks a bit further below it and Amazon's too big, we've got too many managers we need to delayer. And you know the implicit, when you talk to people in the company, they're like yes they wanted a basically cheap headcount reduction. When you talk to firms the thing I always wanna point out is, yes, in a sense it's a free layoff. So you're roughly, you maybe see 5%, 10% of people quit but you don't get to choose who quits. That's the big downside. And the cost for Amazon is, guess what? A lot of the top AI talent left, a lot of the top cloud, a lot of the top salespeople. So it's kind of good in the short run, it's a cheap layoff but it damages long run growth.
Neale Mahoney: And if I'm an executive or you know, I'm a director of a research institute here, I'm thinking about what sorts of jobs can be done remotely, how often I need people in the office. Like some things are obvious. You know like if you need to do physical work on campus, you need to be here, but what are the things I should be thinking about?
Nick Bloom: So I think for the types of jobs that are unclear, think professional graduate jobs, the big upside of coming in is mentoring. So there's a ton of evidence, it's just easier to mentor in person. Like there's a lot of unspoken things and I was actually talking to someone earlier in the week from a tech firm that runs sales and she was saying, you know, the sales agents, even though they're on the phone all the time, they're actually better in person 'cause they can listen to the person on the phone next door and they see what they're doing. So mentoring is the big one. You know, close second would be innovation. Like we have research seminars. And what you notice when in person people are mostly paying attention, not always, I notice there's some phone checking but you know, whereas you notice those zoom meetings, there's enormous amounts of people multitasking. And then the third one will be like building culture that you know, we know each other's kids and stuff. So those are best in person but you don't need to be in person every day. So the benefits of a home is it's easier to concentrate, it's quieter so there's a more deep work and you save, typically an American saves an hour and a half a week. So why that the classic organization including I think SIEPR would be, you might come in three days a week, Tuesday, Wednesday, Thursday you have all your mentoring, you're in person, your meetings then. Monday, Friday is quiet time, deep work, et cetera. And so that's the kinda standard structure.
Neale Mahoney: On our own teams, Nick and I both manage people who are hybrid. So back in the cafe I ask him how we or any manager can do a better job overseeing staff in those hybrid roles.
Nick Bloom: Tip one is when people in the office you can see what they're doing. So Neale, if you were managing me, you could walk by and say, is Nick on his computer? Is he typing away? When I look at his screen, is it Excel or is it champions league? So you have a kind of rough idea, but when I'm at home you've no idea what I'm doing. So advice one is you need proper performance evaluation tools like track output. And actually I've had this discussion a few times, if you can't evaluate an employee's performance, you don't wanna have them work from home. Second main thing is you want to coordinate. And that means like if I ask you or me, why do I want to come into work or thousands of people, they basically say they want to collaborate and see colleagues. It's not about the free pizza or the donut or the bagel. So you wanna pick the same days and mostly that's like Tuesday, Wednesday, Thursday.
Neale Mahoney: So work from home, it's changed obviously how people work, but it's also changed how people play. And I know you have fascinating facts on how our consumption of leisure has been changed by this shift.
Nick Bloom: Yeah, so since 2020 I must have talked to probably at least a thousand, maybe even 2000 managers, execs team. I just spent all my time pretty much talking to 'em. And this topic came up a lot, which is golf. Now I don't actually play golf. I've tried, I'm just so bad I kinda gave up. But number of people said it's impossible to get a round a golf, it's really busy. So we got data in golf and the way we got data in golf is actually using GPS data. So we worked with a major US car company and they have about 20 million journeys a day and we define golf as going to a golf course and staying there for between two to six hours. And what you see in the data is there has been an explosion of golf playing post pandemic. And it's particularly weekdays. So it used to be pre-pandemic golf is basically after work on weekends you can see it. Courses are quiet on like a Wednesday afternoon. Post pandemic it's really busy. So golf, but in general when you talk, I mean I kind of collect a bit more data- Pickleball, yoga studios, hair salons, anything that I recall kind of the leisure economy used to be crushed into, gyms, after work or weekend now seems to have spread out.
Neale Mahoney: It's super fascinating. Also fascinating if you think about efficient use of resources, right? That on the one hand, you know now offices are sitting empty, on the other hand, oh yoga studios were empty most of the day except early in the morning, late in the evening and now you're getting better use of that retail space. So fascinating what it's doing to the economy. I know if you studied the impacts of work from home on the housing market. Can you tell me a little bit about what you found?
Nick Bloom: Yeah, we have a paper in the Proceedings of the National Academy of Sciences We called this the donut effect.
Neale Mahoney: And that's not a Homer Simpson thing.
Nick Bloom: No, you know, it is an American donut. Actually the British donuts is solid. It's an American donut. So you see it in the Zillow, I've talked to Rich Barton who wasn't a recent- he was one of the co-founders of Zillow. So pre pandemic, if you have to go in every day to you know, Goliath National Bank to make up a fictional bank in the city center, you wanna live near in. Now you're only in three days a week or to TechCo. And so you think, well I want a bit more space and you move out to the suburbs, more space, maybe a backyard for your kids. We see en masse, Americans have moved out from city centers out to the suburbs. For everyone listening, what that's done is tended to put relatively pressure down on city center rents and prices and put it up in the suburbs. So I'm aware 'cause of you know, the housing market, even city centers are up, but if you look at the suburbs, they're up a lot more. So somewhere that's than an hour to an hour and a half from Central New York has seen the largest price increases and the biggest rise in house prices 'cause there's just so many more people that are happy to live out there.
Neale Mahoney: And I know during the pandemic people were living in Hawaii or moving out to Boulder, Colorado or Boise, Idaho. Have those effects sort of stuck that there's now like a permanent sort of class of people living in these like great towns of recreation and working from home?
Nick Bloom: That more extreme version has kind of waned a bit. It's fallen back. So there are not that many very high paying jobs now in the US that are fully remote. So almost 10% of Americans are fully remote. But if you look at who they are, a lot of it's like call centers, payroll, it's kind of stuff that isn't out in Hawaii. So what seems to be permanent is the boom in the suburbs. It's kind of interesting from a big history perspective. So if you go back as a kid, you know, I visited New York in the early '80s and I remember back then city centers were scary places. Like we went to the McDonald's on Times Square and there were two guards both with open carry guns. It's like nowadays city centers, you know, from basically '80s to about 2019, crime went down and city centers became more and more expensive and more dense. The pandemic partly unwound that 'cause people stopped urbanizing and moved out a bit to the suburbs.
Neale Mahoney: Yeah, no, super interesting if you look at the eras, right, there was urbanization then interstate highway system and sort of white flight to the suburbs after '68 then we saw the yuppies wanting to live in the cities again. And now we have the donut effect.
Nick Bloom: Exactly right.
Neale Mahoney: Interesting trends in the housing market.
The shift to workers spending more time at home has had some fascinating peripheral effects. Strolling across campus, Nick shared some of those lesser known impacts.
Nick Bloom: It turns out burglars have figured out that there are tons of people working from home and burglars don't particularly now wanna break into houses in the suburbs in the middle of the day. Because either you break in on some guy sitting there in his pajamas or you know, there's no one in house A, the Perkins across the road are working from home and so there's been a big reduction in burglaries in suburban areas.
Neale Mahoney: Reminds me there's- there was like a high profile string of robberies, you know, of like premier league players homes during matches.
Nick Bloom: Yes.
Neale Mahoney: You knew when their entourage was gone and you knew there was a bunch of Rolex's sitting in the apartment.
Nick Bloom: Exactly, so we've had the reverse effects. It is partly why during the pandemic there's a bit of a crime surge in city centers but apparently criminals are particularly nervous about people that report them and give evidence. And so those kind of people are all at home, working at home. So they don't wanna break into suburbs, but there's fewer of them on the street in city centers.
Neale Mahoney: So one consequence of remote work is activity in central business districts in cities. Tell us a little bit about the path we've been on.
Nick Bloom: Yeah, so the cities have had mixed effects. So office utilization is still down. Part of the solution has been convert offices to residential. Really interestingly it depends on the type of office. So offices that are built before World War I in particular are what's called tall and skinny. So there was no mass electrification. So if you built an office in like 1910, like the flat iron building in New York. You're basically relying on daylight to light all the rooms since that converts very easily to apartments. So a lot of those empty offices have been converted. The problem is a lot of these offices built in the '60s '70s and '80s vast slab like buildings that don't really convert. So that stuff is empty. In general city centers have recovered. There was a paper last week at the remote work conference that was sponsored by SIEPR that was here in Stanford.
Neale Mahoney: In-person remote work.
Nick Bloom: Yes, I know, I will never die on you know that joke is every, we've been having this for four years but yes, one of the papers, in fact two former students, Franklin Chen and Ichen Su had a paper showing cities are recovering primarily driven more by consumption than by work. So they had a lot of data showing there's many more what they call amenity visits into city centers. So what's going on, if you take San Francisco and New York, there are less worker bees going in every day 'cause they're working hybrid. But a lot of folks now they work from home for the day and go out for dinner for the evening. And so they kind of like, I've been at home all day and at this point I want to get out. And so they go out, they tend to go out to what they call the nicer parts of town. So they look at property prices. What we're seeing is nice parts of town are actually doing pretty well. It's kind of lower quality offices in less good parts of town that are struggling. But real core city centers, San Francisco's revitalized. The big policy thing that's become very obvious, particularly in San Francisco is you do need proper police. So San Francisco's had recently the current mayor has done well and he's basically just been tougher on enforcing police. Why is that obvious from Econ 101? Well, if people are going into city centers to consume for leisure, they really don't want to get mugged or have their car broken into. They're just not gonna make the trip. So that is a group that is very sensitive to crime.
Neale Mahoney: Fast forward 10 years, what does work from home look like?
Nick Bloom: So I think it's actually a pretty safe bet if we fast forward 2035, 2040 work from home will be way up. Why is that? Well, in the long sweep of things, what really matters is technology. So if I kind of take you back, you know, I interviewed the other day, Jack Nilles, that was the guy that coined the word telecommuting. He had a paper in 1973. He said, look, when its first started out, the phones are really expensive and it was hard. And then if you think about it, in the '90s we got computers and in the 2000's you got the internet and then the personal computer and then video calls and you know, cloud, et cetera. So technology's getting better. I talked to a lot of startups around here, couple of weeks ago I was with a firm up in San Francisco. They had this thing called a portal. So like a 12 x 12 foot screen. And it's not as good as meeting in person, if Zoom is 5 out of 10, this is like 8 out of 10 and meeting in person is 10 out 10. But you can see someone's full height and their shape and you can also tell whether they're on their phone 'cause one of the problems on Zoom is people's faces changing color. Like, wait, are they talking? You know, are they watching a movie? You know, what is going on? Ten, fifteen years from now I think will be more virtual. It's not like we'll be fully virtual, but when the communication gets better. So the screens are big. Imagine you can have a whole wall sized screen, you can walk around, there are cameras throughout it. So when I'm talking to you, it's not like, 'cause one of the problems right now the laptops is the camera's at the top. So Neale, if I'm having a zoom with you, it looks like I'm looking at your shoes all the time.
Neale Mahoney: Totally
Nick Bloom: So all of this stuff is getting slowly fixed. So in the long run think it's a very safe bet.
Neale Mahoney: Can I- Can I run something by you which pushes in the other direction? You can make the argument that things you can do from home are things that AI is gonna get good at doing. And so the types of jobs we're gonna have in the future are the masseuse, the hairdresser, the physical therapist, the home health aid, like where we're gonna see job growth is precisely where you can't do it from work from home.
Nick Bloom: That's a great point. I think that fully remote jobs are at risk. Actually they're at risk from, so I'm gonna break the economy into fully in person, hybrid and fully remote. So fully remote are at risk I think from two sources. One is AI, you're totally right. The other is just offshoring. So I hear this a lot from companies that said, as soon as we figured out job X can be fully remote, we've thought about do you offshore often the challenges of offshoring are time zones, sensitive data, language issues. But for something relatively, I mean already we have call centers around the Philippines. So AI is another threat. You know, one exec the other day was saying one of the things they worry about with remote AI is authenticity. Like who you're talking to. Right now AI isn't good enough to have live videos, but two or three years from now, one of my colleagues, as you saw in the SIEPR summit, Erik Brynjolfsson was saying he has so many students in his class he can't evaluate all of them. So what he has, he has is Erik Avatar that's run by AI, interview them. And it's like, well if you can do that maybe the Erik avatar can teach.
Neale Mahoney: Yeah, and then what's the job left for Erik?
Nick Bloom: So I think fully remote is risky. Hybrid I think is fine 'cause there's yet, and it's nowhere near physical robots. You're right, that can replace us. So a manager will still need to be in two days a week to empathize with someone, to do tough news, to do mentoring.
Neale Mahoney: It was wonderful to have you here in person.
Nick Bloom: Yes.
Neale Mahoney: Talking about work from home. Always a delight to talk to my friend and colleague Nick Bloom. Thank you.
Nick Bloom: Yeah, thanks so much Neale. It's great to be here.
Neale Mahoney: The places and spaces we work in continue to be fundamental to almost every aspect of our lives. From housing and crime to recreation and technology, the state of remote work will continue to reshape our economy in new and fascinating ways. I want to thank Nick Bloom for this great conversation and all of you for listening in. I'm Neale Mahoney and Econ To Go is where we bring Stanford economics into your everyday lives. If you enjoyed this episode, subscribe or follow the show wherever you get your podcasts. We've got more smart, curious conversations coming your way from the Stanford University campus. Until next time.
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