IMF Working Papers

The Impact of Reduced Commuting on Labor Supply and Household Welfare: A Post-Pandemic Analysis

ByYi Ji, Myrto Oikonomou, Carlo Pizzinelli, Ippei Shibata, Marina Mendes Tavares

May 3, 2024

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Yi Ji, Myrto Oikonomou, Carlo Pizzinelli, Ippei Shibata, and Marina Mendes Tavares. "The Impact of Reduced Commuting on Labor Supply and Household Welfare: A Post-Pandemic Analysis", IMF Working Papers 2024, 094 (2024), accessed 12/6/2025, https://doi.org/10.5089/9798400274503.001

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper examines the impact of changes in commuting time on welfare and labor supply in the aftermath of the COVID-19 pandemic. Utilizing data from the American Time Use Survey, we observe a shift in commuting time and working hours across occupations with varying ability of telework after the pandemic. We develop a household model of labor supply that accounts for commuting time, and we characterize how changes in commuting time impact individuals' and spouses' labor supply. We calibrate the model to the data. Our findings reveal that the observed post-pandemic decline in commuting time yields significant welfare gains: between 1.5 to 4.5 percent of consumption equivalents for households where at least one spouse experiences reduced commuting.

Keywords: Commuting time, Labor Supply, Welfare Gains, Working from home