Regional Disparities in Embracing Work-from-Home: A Focus on the EU

Abstract

The increasing prevalence of remote work in the labour market has sparked investigations into its effects on regional development. Critical factors such as job suitability for telecommuting, individual and household characteristics, and technological limitations are pivotal in implementing remote work arrangements. These opportunities are necessary for decreasing the digital divide in Europe, particularly from a regional standpoint. The main goal of this paper is to investigate the changes in the EU regional scale of Work-from-Home (WFH) in 2021–2022 with respect to the pre-existing inequalities in access to ICTs, differences in the economic structure, demographics, and education. More specifically, this explanatory study aims to indicate which factors influencing the adoption of WFH setups in the EU regions drove the deepening digital divide in 2021–2022. Our methodology entails a two-pronged approach, combining theoretical analysis with empirical investigation. Our findings indicate that regions with higher initial work-from-home (WFH) rates in 2021 experienced more pronounced declines in remote work throughout 2022. This inverse relationship suggests that regions heavily reliant on WFH in 2021 faced increased pressures or incentives to revert to in-person work arrangements as pandemic circumstances evolved or policies changed. Furthermore, the income level and employment share in Information and Communication Technology (ICT) emerged as the most significant and robust predictors of the increase in the scale of work from home in 2022. JEL codes: D31, E24, O33