Bifurcation patterns in a remote work economy: intercity impacts of remote work on spatial distribution of workers and firms

Aizawa, Hiroki and Saka, Takuhiro (2025): Bifurcation patterns in a remote work economy: intercity impacts of remote work on spatial distribution of workers and firms.

Abstract

In this paper, we examine how the introduction of remote work affects the spatial distribution of workers and firms in cities, social welfare, and their utilities. Developing a New Economic Geography model that incorporates remote work, we explore how transportation costs affect these distributions and the utility levels in equilibrium. We conduct a bifurcation analysis of an equilibrium where all mobile workers agglomerate in the central region of a long narrow economy where an odd number of regions are evenly distributed along a line segment. The bifurcation mechanism, which represents the emergence of remote work after its introduction, is elucidated. Results show that remote work can shift the equilibrium toward two types of equilibria. In one equilibrium, remote workers reside away from the central region, while firms operate in the center. In the other, remote workers reside in the central region, while firms that employ them operate outside the center. In the latter case, even the utility of remote workers declines due to the introduction of remote work.

• Item Type: MPRA Paper
• Language: English
• Keywords: Agglomeration, Bifurcation, Economic geography, Remote work, Welfare.
• Subjects: R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R10 - General; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R12 - Size and Spatial Distributions of Regional Economic Activity; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R2 - Household Analysis > R23 - Regional Migration ; Regional Labor Markets ; Population ; Neighborhood Characteristics

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