Oregon Office of Economic Analysis

There has been no bigger economic shift in the past three years than working from home (WFH), primarily for white collar type employees, and the impact on urban cores nationwide. While our traditional data from the Census’ American Community Survey lags, it’s important to take stock of what we know so that new, incoming information can be better processed. In the months ahead we should get two new pieces of data to help us better understand the current landscape. In February, BLS should release the 2022 Business Response Survey which will include information on WFH from a firm’s perspective, and also get at the number or share of hours worked at home and in the office, providing better detail on hybrid work. In March, Census should release the 2022 population estimates by county and metro area, providing a better look at the geographic pattern of change and the potential impact on WFH on migration. But for now, let’s dive into the 2021 ACS microdata which was just released a couple months ago and I’ve now been able to process.

In 2021, working from home was obviously considerably more common than it was pre-pandemic. The share of workers that WFH increased from around 6% nationwide in 2019 to 18% in 2021. So while WFH increased, it was and is still a minority of the workforce because most of us need to go into a place of work to cook a meal, give care, or swing a hammer. Here in Oregon the increase was a bit larger, going from 7% in 2019 to 23% in 2021. We rank 5th highest in WFH across all states.

However, the patterns of WFH primarily looked like big cities sheltering in place. The highest rates of WFH, and the largest increases were in the primary cities of large metro areas. If you zoom in further, the biggest increases were in their urban cores and close-in neighborhoods. The second largest increases were seen in the suburbs of big cities. At a metro level, Portland’s increases from 2019 to 2021 ranked 11th largest among all metro areas nationwide. Among the Portland suburbs the largest increases were seen in Washington County, then Clark County, followed by Clackamas. The next biggest gains overall were in medium-sized metro areas, and finally rural economies. One implication here is that some traditional WFH hotbeds like Bend – long a national leader – no longer rank as high not because they did not see an increase, they did, but because dozens of large metros jumped ahead during the pandemic.

As such, WFH in 2021 did not look like it unleashed this massive new wave of migration and household relocation decisions. And while that is certainly true at the top level, if you dig beneath the surface, a clear impact on the types of migration seen in 2021 does emerge. In 2019, workers who did not WFH moved at a higher rate than those who did WFH. In 2021 that pattern reversed, where WFH migration rates picked up, and those who did not WFH slowed down. As a result, the share of people that moved in 2021 was tilted considerably more toward those who did WFH. It’s not as simple as this because so many things changed at once during the pandemic, but this relationship is certainly part of those changes.

When thinking about the implications and the outlook, high-cost states and metros saw a larger increase in the share of folks moving away that did WFH. Comparing worker migration patterns across states in 2019 and 2021, the relationship between WFH and outmigration from higher cost states strengthened considerably. Correlation is not causation, but the empirical patterns do make theoretical sense. And it’s important to keep in mind that even if the reason someone moves away is due to [insert favorite talking point here] it could still be underpinned by the fact that WFH now allows more people to do so.

Looking forward the real question is to what extent WFH impacts are more of a one-time adjustment, or a process that is just now getting underway. 2021 was still a messed up year. But I do think the 2022 county population estimates have the potential to shed light on these impacts. In 2021 the data do look more like sheltering in place, and urban cores nationwide lost population — including in some Sun Belt metros like Atlanta, Dallas, Nashville, Orlando etc in addition to places like Portland and Seattle. However there is that impact of WFH out-migration from high-cost areas under the surface. In 2022 we know Census estimates the West Coast experienced net out-migration. Do some of those other big cities revive, or does the general population patterns of urban-suburban-rural dynamics hold? Is it a general WFH impact, or are we seeing new or different regional patterns emerge, and a continuation of the high-cost vs low-cost regions? These are things I am closely watching.

Scroll through the slides for more details on the high level summary.

Finally, it’s always important to update your views based on the actual data. I will confess that back in 2020 I was more muted or less enthusiastic about the longer-term impacts of WFH. It wasn’t that it couldn’t be done or you couldn’t envision such a future, but rather about the possibility of such a large shift in business and workplace practices. However, the pandemic lasted a long time. It wasn’t until about 18 months later, in the fall of 2021 that there was the return to the office narrative, and then another wave of the pandemic hit a little while later. Today we are coming up on three years since the start of the pandemic. Some form of WFH is clearly here to stay for many more workers than it was previously.

Looking forward I think there will be some cross currents in the data. On one hand we will see things like hosts and hostesses, teachers, and security guards report they are no longer working from home, like you see some in the 2021 data. However some other occupations that maybe you wouldn’t have thought about as much in terms of tailors and seamstresses may continue to see higher WFH than in the past, especially if their place of work used to be in downtowns where there are now fewer commuters, or fitness instructors as customers are now more comfortable with remote workouts, etc. But I think the larger impact will be on the potential relocation decisions. Pre-pandemic it was clear that every corner of Oregon was average or above average on both WFH and broadband access, and Oregon was a place that year in and year out people wanted to live. But how all of that intersects with our long-standing concern about housing affordability being a repellant was a bit unknown. The upcoming 2022 data will help shed some light on that, but as I mentioned the other week, I think we will honestly need to see the 2023 data to get a more complete picture, even as we don’t really have the luxury of waiting around for that.