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arXiv · 2506.16671

A new equilibrium: COVID-19 lockdowns and WFH persistence

Laura Ketter·Todd Morris·Lizi Yu
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Abstract

This paper documents a robust link between COVID-19 lockdowns and the uptake and persistence of working from home (WFH) practices. Exploiting rich longitudinal data, we use a difference-in-differences strategy to compare office workers in three heavily locked-down Australian states to similar workers in less affected states. Locked-down workers sustain 43% higher WFH levels through 2023 - 0.5 days per week - with a monotonic dose-response relationship. Persistence is driven by adjustments on both sides of the labor market: employers downsize office space and open remote or hybrid positions, while employees relocate away from city centers and invest in home offices and technology.

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Laura Ketter, Todd Morris, Lizi Yu. 2025-06-20. A new equilibrium: COVID-19 lockdowns and WFH persistence. https://arxiv.org/abs/2506.16671

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