The global polarisation of remote work

Abstract

The Covid-19 pandemic has led to the rise of digitally enabled remote work with consequences for the global division of labour. Remote work could connect labour markets, but it might also increase spatial polarisation. However, our understanding of the geographies of remote work is limited. Specifically, in how far could remote work connect employers and workers in different countries? Does it bring jobs to rural areas because of lower living costs, or does it concentrate in large cities? And how do skill requirements affect competition for employment and wages? We use data from a fully remote labour market—an online labour platform—to show that remote platform work is polarised along three dimensions. First, countries are globally divided: North American, European, and South Asian remote platform workers attract most jobs, while many Global South countries participate only marginally. Secondly, remote jobs are pulled to large cities; rural areas fall behind. Thirdly, remote work is polarised along the skill axis: workers with in-demand skills attract profitable jobs, while others face intense competition and obtain low wages. The findings suggest that agglomerative forces linked to the unequal spatial distribution of skills, human capital, and opportunities shape the global geography of remote work. These forces pull remote work to places with institutions that foster specialisation and complex economic activities, i. e. metropolitan areas focused on information and communication technologies. Locations without access to these enabling institutions—in many cases, rural areas—fall behind. To make remote work an effective tool for economic and rural development, it would need to be complemented by local skill-building, infrastructure investment, and labour market programmes.