The research summarized in this post is co-authored by Mert Akan, Nicholas Bloom, and Shelby Buckman (Stanford University); Jose Maria Barrero (ITAM); Steven J. Davis (Hoover Institution); and Tom Bowen, Luke Pardue, and Liz Wilke (Gusto).
Download the full research slide deck here.
Methodology: This study uses Gusto’s proprietary data, which covers more than 300,000+ mostly small and midsized businesses, to create matched employee-employer data for a balanced panel of roughly 5,800 businesses from 2018 to 2023. We weight the individual-level Gusto data to match the corresponding age, sex, and industry distribution in the Current Population Survey.
Key Findings
- Compared to 2019 levels, employees’ average distance from their home to their employer has risen 2.7x: The mean distance to work rose from 10 miles in 2019 to 27 miles at the end of 2023. The share of workers living more than 50 miles from their employer rose more than five-fold, from 0.8% to 5.5%.
- Millennials are leading the way in living farther from their employers: Employees 30-39 years old live the farthest away from their employer, and the distance has risen the most among this group. The distance to work has risen 2.9x among 35-39-year-olds (from 10 to 29 miles) and 2.8x among 30-34-year-olds (from 11 to 31 miles), a sign that this group is taking advantage of the flexibility remote and hybrid work provides as they reach parenting age.
- The highest-earning workers are driving the rising distance: In 2018, workers earning $10,000 to $50,000 lived on average 11 miles from work, compared to 12 miles for workers earning more than $250,000 per year. By December 2023, the distance for those making $10,000-$50,000 rose to 18 miles, while the highest earners increased to 42 miles.
- Employees hired after the pandemic struck are driving the rise in distance from home to employer: The rise in employee-employer distance is driven mainly by businesses hiring workers who live farther away since the pandemic. By the end of December 2023, workers hired since the pandemic work an average of 35 miles from their employer, compared to 16 miles among workers who were hired before the pandemic hit.
The rise of remote and hybrid work has been one of the most profound and long-lasting economic legacies of the COVID-19 pandemic – a change reflected in the increasingly large distance the average worker lives from his or her employer. And nearly four years on, while much of the public conversation around remote work is focused on the country’s largest companies mandating returns to the office, data shows that – for small and mid-sized businesses (SMBs) there remains a sustained pattern of workers living farther away from their employer’s office locations.
Workers Now Live Farther from their Employers Since the Pandemic
The evolution of employees’ relationship to their work is summarized in Figure 1, which plots the average number of miles an employee lives from their employer before and after the pandemic. The mean distance to work grew from 10 to 27 miles between 2019 and 2023, increasing sharply starting in March 2020, when work-from-home policies became increasingly common due to the COVID-19 pandemic. This jump steadily increased from 2020 through the start of 2023, after which it has grown at a slightly slower pace. Overall, this shift comes as a result of several factors over that time: workers whose remote or hybrid work became a permanent feature post-pandemic could have moved farther away from their employer, taking advantage of less frequent (if any) commutes to the office, and workers whose job did not afford that flexibility could find new, remote work opportunities across the country.
Figure 1: Mean distance from the workplace rose from about 10 miles to more than 25 miles
This Rise is Sharpest for Millennials and Higher Earners
The rise in the average employee’s distance from their employer has not been uniform, however. First, Figure 2 compares the change in distance by age group, looking at each group’s 2018-2019 average to the mean across 2022-2023. We find that, while the average distance to employer was quite similar across most age groups in 2018-2019, by 2022-2023 workers in their thirties were working the farthest from their employer of any age group. Workers 30-34 years saw their mean distance rise 180% (from 11 to 31 miles), while 35-39-year-olds increased 190% (10 to 29 miles). This finding – that parent-age workers have driven the rise of remote and hybrid work – reinforces previous research indicating that parents seeking flexibility in their careers are the most likely to work from home at least a few days each week.
Figure 2: Employees in their 30s live farthest away from their employers after the pandemic
Additionally, we see that this increase in employee-employer distance is largest for the highest-earning workers. As plotted in Figure 3, from 2018 to March 2020, workers across income distributions lived similar distances from work. For instance, a worker earning $10,000 to $50,000 lived on average 11 miles from work, and workers earning more than $200,000 per year lived on average 12 miles away. By December 2023, the distance for those making $10,000-$50,000 rose to 18 miles, while the highest earners increased to 42 miles. The rise in distance among higher earners likely reflects the concentration of those workers in professional sectors whose work can be done in remote and hybrid settings; the rise in distance among lower earners, who are more likely to work in jobs that typically require in-person work, shows the pervasiveness of this remote work revolution across the economy.
Figure 3: Mean distance rises more for workers with greater annual earnings
New Hires Are Driving the Rise in Distance from the Employer
This rise in employees living farther from their employers since the pandemic could be driven in two ways: by employees staying in current jobs, which are now at least partially remote, but moving farther away, taking advantage of a less frequent comment for a less expensive home, more space, or another amenity. Alternatively, this rise could be driven by businesses hiring remote workers into new roles created after the pandemic, as remote work became one of the most sought-after features in any job posting.
Figure 4 separates the evolution of mean distances among employees hired before the onset of COVID-19 in March 2020 and those hired on or after March 2020. We find that the rise of employee-to-employer distance has been driven largely by the longer distance to work among employees hired since the pandemic. Since March 2020, mean distances among existing workers rose from 10 to 16 miles. On the other hand, the mean distance among workers hired in March 2020 or later has risen from 19 miles in March 2020 to 35 miles in December 2023. A reasonable explanation for these patterns is the increased emphasis employees place on the flexibility of remote and hybrid roles. In addition, business owners can find new talent they need without by looking beyond the geographic confines of a specific work location.
Figure 4: The Rise in Mean Distance Mainly Reflects Persons Hired Since March 2020
Conclusion: SMBs are Looking More Widely for Talent Today
Despite many pronouncements about the death of remote and hybrid work, our data tell a different story. Employees now live almost three times as far, on average, from their employers than before the pandemic. Moreover, our data suggests that newly-hired employees, in particular, live considerably farther away from their employers than employees hired before the pandemic. This trend appears to be ongoing. While headlines are full of executives from many larger firms pushing for a return to pre-pandemic working situations, small and mid-sized companies, and their employees still see the large benefits from remote and hybrid work. These benefits include the flexibility that workers want and access to a larger talent pool that employers seek.
See our fuller discussion of the data, methodology, and findings here.
