Richard Florida is a co-founder and editor at large of CityLab and a senior editor at The Atlantic. He is a university professor in the University of Toronto’s School of Cities and Rotman School of Management, and a distinguished fellow at New York University’s Schack Institute of Real Estate.
More of us than ever before are choosing to forgo formal offices. But some metro areas have seen bigger gains than others.
Aided by internet technologies like Skype and Dropbox, more Americans than ever before are choosing to forgo formal offices in favor of working from home.
A U.S. Census Bureau report [PDF] released this month examines the metros with the highest concentrations of people who work out of their home, finding increasing levels nationally and slight, but notable, geographic differences.
Nationally, the number of workers responding that they worked exclusively at home increased by 1.8 percentage points (4.8 percent to 6.6 percent) from 1997 to 2010, according to the report. Workers who reported that they worked at least one day per week at home increased from 7.0 percent in 1997 to 9.5 percent in 2010. Just under half of those who work at home were also self-employed, while a quarter were from management, business, and finance occupations.
The map below, from the report, charts the geographic breakdown of workers who work from home by metro area.
The West Coast has many metros with high concentrations of people who work from home, especially in California's coastal regions. Los Angeles had 5.0 percent, San Francisco had 6.2 percent, and San Jose had 5.1 percent. Further north, Seattle had 5.5 percent, Portland 6.5 percent, and Medford 8.4 percent. Several metros in Arizona and Colorado also reported large concentrations. (Complete listings are available in Table 2 of the report's Appendix).
|Top Ten MSAs by the Percent of Workers over Age 16 Working at Home|
|Rank||Metro||Percent Working at Home|
|3||Santa Fe, NM||8.3|
|5||Santa Rosa-Petaluma, CA||7.9|
|6||Mankato-North Mankato, MN||7.7|
|8||St. Cloud, MN||7.6|
|9||Athens-Clarke County, GA||7.5|
|10||Austin-Round Rock-San Marcos, TX||7.3|
Table data from U.S. Census Bureau report
But what factors are associated with the share of workers who work from home?
To get at this, my colleague Charlotta Mellander ran a simple correlation analysis between the share of people working from home and key economic, demographic and social characteristics of metro areas. As always, note that correlation does not equal causation, and especially in this case other factors we have not accounted for may come into play. Several things stand out.
First off, working from home is modestly associated with larger, denser metros (with correlations of .22 to population and .30 to density).
Working from home is more likely in metros with higher wages (.42) and incomes (.40), as well as those with higher housing costs (with a correlation of .51 to median monthly housing costs).
Finally, working from home is associated with higher levels of happiness and well-being (measured by Gallup surveys with a correlation of .50). This is not surprising since long commutes by car are one of those things that takes the biggest negative toll on our happiness.
The combination of improved technology, congested highways and higher oil prices means the trend to working at home is likely to increase in the future.