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Climate-friendly remote work hasn’t weighed on productivity, Fed study shows

A person working remotely
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The Covid-induced shift to remote and hybrid working arrangements has not had any material impact on productivity growth, according to a study by researchers at the Federal Reserve Bank of San Francisco.

The context: While complicating things for some landlords and employers, working from home has yielded a number of benefits to society.

Because they don’t need to commute, remote workers could have a 54% lower carbon footprint compared to on-site workers, according to a US-focused study published in the Proceedings of the National Academy of Sciences.

Other studies have found that the employment rate for disabled people has reached all-time highs in the US thanks to new ways of working.

“Daily tasks such as commuting and navigating an office space can be difficult for people depending on their disabilities,” Bloomberg said in a recent report. “As companies adopted remote and hybrid work arrangements, more disabled people applied for and landed jobs — sometimes for the first time in years.”

Meanwhile, reduced demand for on-site workspace means many old office blocks are being converted into much-needed residential units.

What’s new: The Federal Reserve Bank of San Francisco compared productivity growth rates between industries that are well suited to remote work and those that aren’t.

It found little evidence that the shift to remote and hybrid work has either substantially held back or boosted the rate of productivity growth.

The researchers noted that continuous innovation is key to sustained productivity gains.

On the one hand, working remotely can foster innovation through “a reduction in communication costs and improved talent allocation across geographic areas.”

On the other, working off-site could hamper innovation by reducing in-person office interactions that foster idea generation and diffusion.

“The future of work is likely to be a hybrid format that balances the benefits and limitations of remote work,” the researchers concluded.

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