Full Citation
Title: Who Should Work from Home during a Pandemic? The Wage-Infection Trade-off
Citation Type: Working Paper
Publication Year: 2020
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ISSN:
DOI: 10.3386/w27908
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Abstract: Shutting down the workplace is an effective means of reducing contagion, but can incur large economic losses. We construct an exposure index, which measures infection risks across occupations, and a work-from-home index, which gauges the ease with which a job can be performed remotely across both industries and occupations. Because the two indices are negatively correlated but distinct, the economic costs of containing a pandemic can be minimized by only sending home those jobs that are highly exposed but easy to perform from home. Compared to a lockdown of all non-essential jobs, the optimal policy attains the same reduction in aggregate exposure (32 percent) with one-third fewer workers sent home (24 vs. 36 percent) and with only half the loss in aggregate wages (15 vs. 30 percent). A move from the lockdown to the optimal policy reduces the exposure of low-wage workers the most and the wage loss of the high-wage workers the most, although everyone's wage losses become smaller. A constrained optimal policy under which health workers cannot be sent home still achieves the same exposure reduction with a one-third smaller loss in aggregate wages (19 vs. 30 percent).
Url: https://www.nber.org/papers/w27908
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Authors: Aum, Sangmin; Lee, Sang Yoon (Tim); Shin, Yongseok
Series Title: NBER Working Paper Series
Publication Number: 27908
Institution: National Bureau of Economic Research
Pages:
Publisher Location:
Data Collections: IPUMS USA
Topics: Health, Labor Force and Occupational Structure, Other
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