Mobility restrictions and the substitution between on-site and remote work: Empirical evidence from a European online labour market

Keywords Remote work; On-site work; Stay-at-home requirements; Cost of working on-site; COVID-19; Online labour markets Highlights * We explore the effect of mobility restrictions on the substitution between on-site and remote work. * COVID-19-related mobility restrictions increased the cost of on-site work. * We use unique company data from a large European online labour market. * We find that employers are substituting remote employment for on-site employment. * There is no substantial change in overall employment. Abstract Intensified by the COVID-19 pandemic, online labour markets are at the core of the economic and policy debate about the future of work and the conditions under which we work online. We analyse the effects of an increase in the cost of on-site work induced by COVID-19-related mobility restrictions on the substitution between on-site and remote job postings and between on-site and remote hires. We benefit from the fact that the implementation of stay-at-home requirements varies by country, time and level. We use unique company data from a large European online labour market. We provide empirical evidence for a positive effect of stay-at-home restrictions on job postings and hires of remote work relative to on-site work. Overall, our results suggest that employers are substituting remote employment for on-site employment, while there is no substantial change in overall employment. Author Affiliation: (a) University of the Bundeswehr Munich, Neubiberg, Germany (b) Max Planck Institute for Innovation and Competition, Munich, Germany (c) University of the Balearic Islands, Palma de Mallorca, Spain * Corresponding author. Article History: Received 17 December 2020; Revised 21 September 2021; Accepted 14 October 2021 (footnote)# Both authors contributed equally to this paper. Frank Mueller-Langer gratefully acknowledges financial support from a research grant of the University of the Bundeswehr Munich. Byline: Frank Mueller-Langer [frank.mueller-langer@ip.mpg.de] (a,b,*), Estrella Gómez-Herrera (c,#)