Project website

Exploring Direct and Rebound Effects of Working from Home

Project duration: July 2025 – December 2027

This project is funded by the Austrian Academy of the Sciences (OeAW) under the Data:Research:Austria funding program. See https://www.oeaw.ac.at/en/funding/dataresearchaustria for more information.

Motivation

To mitigate climate change, policymakers are striving to reduce CO2 emissions through various measures such as carbon pricing and fuel efficiency standards. Political support for ambitious carbon pricing policies, however, is generally low. Emissions from passenger cars increased between 2000 and 2019 in the EU, mostly due to growing transport volumes. Increasing traffic volumes likely also explain why, despite notable improvements over the last decades, air quality levels still violate guidelines set by the World Health Organization in most urban areas across Europe. This project aims to investigate whether working from home (WFH)—which has surged due to the recent COVID-19 pandemic—can contribute to solving these environmental issues. Remote work typically results in decreased commuting frequency, potentially reducing CO2 emissions and air pollution from road transport.  However, a rebound effect may occur if workers relocate or switch jobs, leading to increased commuting distances. If WFH options cause workers to commute less frequently but over longer distances, the net effect on emissions is unclear.

Project aims

In this project, we will analyze how WFH affects commuting patterns and their environmental impact by exploiting recent expansions in remote-work options following the COVID-19 pandemic. We will compare trends in commuting distances and frequencies between workers in jobs with high and with low remote-work potential before and after the pandemic. Jobs with limited remote-work potential serve as a control group that captures common time trends because those workers cannot benefit from new WFH options. By pairing the results with vehicle fuel consumption data, we can quantify the impact on CO2 emissions.

Our analysis will be based on novel administrative data from Austria. We will link worker-level and firm-level records from multiple registers within the Austrian Micro Data Center (AMDC). This includes data on commuting distances, a wide range of worker and firm characteristics, and unique information on the extent of remote work, which is available because, starting in 2021, WFH days must be reported on workers’ pay slips. We will pair this with satellite-derived data on municipality-level particulate matter concentrations, enabling us to evaluate the commuting-related effects of WFH on air quality.

The hypothesis underlying our project is that remote work has reduced commuting frequencies but has also triggered changes in commuting distances due to worker relocation and job switching. We expect that the increase in remote work has caused a reduction in CO2 emissions and urban air pollution; however, this reduction is smaller than what one would expect in the absence of a rebound effect. The magnitudes of the counteracting effects on commuting and the resulting changes in environmental outcomes are empirical questions that we plan to answer with this project.