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No Free Lunch

Who can work from home?

The enhanced community quarantine (ECQ) that has been in place in Metro Manila and the rest of Luzon has forced people, except those in essential industries, either to work from home, if that’s possible for what they do, or to stop work altogether. Those who can work from home are more fortunate, as their incomes would have only been partially curtailed at most. But those for whom the feasibility of working from home is nil, very difficult, or only minimally productive have lost the ability to earn most or all of their usual incomes. They are the ones to whom government must target social amelioration assistance.

It would thus be useful to examine the cross-section of workers across industries and occupations, to determine the extent to which work-from-home is feasible and practical. This information would also help in assessing the aggregate economic impact of the lockdown in terms of reduced production and incomes, or how much it would reduce our gross domestic product or GDP. The question had already been gaining attention even before the COVID-19 crisis and ECQ, in light of how severe traffic congestion leads to substantial lost productivity due to idle time lost in traffic delays, and how the consequent stress cuts workers’ productivity at the workplace.

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Fortunately, research is among the activities that can be productively done from home, without having to make a trip to the library or even the laboratory, especially with the wealth of knowledge resources available online. (Thankfully, too, telecommunications and internet services are not among the economic activities that need to be interrupted in a lockdown.) Economic researchers have particularly kept busy addressing important questions to guide both immediate and longer term actions and policy responses to the COVID-19 crisis. A white paper, “How Many Jobs Can be Done at Home?”, released in late March by Jonathan Dingel and Brent Neiman of the University of Chicago, provides answers to our central question. While done for the US, their observations can be useful for examining the Philippine situation as well.

The paper noted that about a third (34 percent) of US jobs can be performed at home. They also found that workers in occupations that can be performed at home typically earn more; the 34 percent of jobs that can be done at home were found to account for 44 percent of all wages earned. The top five industries that lend themselves to work-from-home were Professional, Scientific, and Technical Services; Management of Companies/Enterprises; Educational Services; Finance and Insurance; and Information. For these industries, the shares of jobs that can be done from home range from 68 to 77 percent. The bottom five are Accommodation and Food Services; Agriculture, Forestry, Fishing, and Hunting; Retail Trade; Construction; and Transportation and Warehousing, with work-at-home shares of 3 to 18 percent.

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Based on occupations, those with highest work-from-home shares are Legal; Computer and Mathematical; Management; Education, Training, and Library; Business and Financial Operations; and Arts, Design, Entertainment, Sports, and Media occupations, with shares ranging from 73 to 97 percent. The jobs least workable from home (ranging from nil to 2 percent) are Building and Grounds Cleaning and Maintenance; Food Preparation and Serving Related; Construction and Extraction; Installation, Maintenance, and Repair; Production; Farming, Fishing, and Forestry; and Healthcare Support.

For the Philippines, the above industry and occupational groupings in the labor statistics largely also conform to ours, and results are likely similar. Based on the January 2020 Labor Force Survey, the industries least feasible for work-from-home account for two-thirds (66.3 percent) of all our workers, while those that most lend themselves to work-from-home account for only 10 percent. The least work-from-home occupations account for nearly 3 out of every 4 (74 percent) of all our employed workers. Clearly, the disruption to people’s lives and to the aggregate economy is substantial. By the looks of it, economic contraction (aka recession or negative growth) is already a foregone conclusion.

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