Hoyoung Yoo Abstract

The number of location-flexible jobs has markedly increased in the United Statesin recent years. In tandem with this trend, dozens of municipalities have introduced Remote Worker Relocation Programs that subsidize remote workers to move in. Using the policy variation, this paper provides new evidence on how the influx of remote workers who come with high skills and jobs affects the local residents in destination cities. Leveraging data from Tulsa Remote (the largest and the earliest program) and an event study design, I find that employment increased by 7.95% in the local service sector but fell by 12.6% in the wholesale trade sector after one year of the program in the downtown area where remote workers are concentrated. To study the welfare effects of Remote Worker Relocation Programs more generally, I build and estimate a structural equilibrium model that incorporates workers' selection into the industry. The program improves the average welfare of local residents, primarily due to their higher wages and more varieties of local goods, offsetting higher prices of local goods and rents. The program raises local inequality by 1.44%, with high-skilled local service workers benefit the most, while low-skilled tradable workers experience a slight welfare loss. Lastly, the Remote Worker Relocation Program subsidized by taxes collected from local residents is welfare enhancing, but only up to a certain threshold.