In this paper, we explore new and significant economic geography features of the work-from-home (WFH) revolution. The increased practice of WFH has prompted a potential redistribution of working populations between urban and rural locations, and between large cities and smaller towns. We build directly on the theoretical arguments developed in Shadows and Donuts: The Work-From-Home Revolution and the Performance of Cities, by Steven Bond-Smith and Philip McCann, TPI Working Paper 026, updated November 2024, which posits that larger cities are the major winners from the WFH revolution.
At the level of an individual city, WFH revolution gives rise to a well-known centrifugal ‘donut’ effect whereby the city peripheries and edges are the major winners of these working pattern changes at the expense of the downtown areas. However, the theoretical framework also uncovers for the first time a centripetal hinterland ‘shadow effect’ whereby the larger cities gain at the expense of smaller cities and towns.
In this paper, we test the theoretical predictions by using a uniquely detailed and comprehensive individual-level nationwide Swedish micro-dataset. These data allow us to analyse shifts in commuting distances pre- and post-pandemic and explore their association with teleworkability.
Sweden provides an ideal setting to test the theoretical ‘donut’ and ‘shadow’ predictions, because as well as having uniquely detailed individual-level data, the major urban centres in Sweden are also sufficiently far apart that their hinterlands do not overlap, thereby allowing for a clearer set of empirical insights.
Beyond the well-documented centrifugal ‘donut’-type effects within, our study does indeed find a significant centripetal ‘shadow’ effect on smaller cities. This phenomenon draws workers relocating from outside metropolitan regions closer to major urban areas, reinforcing urbanisation trends, contrary to the expectations of geographic decentralisation enabled by remote work.
These nuanced dynamics – highlighting simultaneous ‘donut’ dispersion effects at the local level and ‘shadow’ concentration effects within the overall urban system – provide new insights into the complex interplay between remote work, urbanisation, and regional development.
Authors Lina Bjerke, Steven Bond-Smith, Philip McCann, Charlotta Mellander