Why Are Nordic Workers so Remote? : Potential Causes and (Some) Indirect Labor Market Consequences

In this article, we show that working from home is much more prevalent in the Nordic countries than in the rest of Europe and we discuss potential causes and labor market consequences of this stylized fact. Likely contributing causes include a good technological infrastructure and comparatively widespread digital preparedness in the population. Recent research also suggests that trust is a crucial prerequisite for maintaining a spatial separation between supervisors and workers in marginal occupations. We show that survey measures of trust are extremely high in all Nordic countries, and that these measures correlate very strongly with work-from-home across countries and industries in Europe even controlling for a range of cross-country differences. Finally, we discuss potential spillover effects of increased hybrid work on the Nordic labor markets. We show evidence suggesting that increased hybrid work has caused a relocation of the production of local service firms from business centers to high-work-from-home residential areas, without affecting average commuting distances of service workers