Working from home is damaging people’s “social capital” and making them work longer hours, but more freedom and the end of the commute have increased the happiness of many employees, the Bank of England’s chief economist has suggested.
Millions of British employees have been working from home since the start of the coronavirus pandemic in March.
The numbers have steadily fallen since the summer, with 23 per cent of people solely working out of their houses in the week to 11 October. But new coronavirus cases and restrictions are likely to make that number rise.
Haldane said the jury was still out on the full effects on working from home on people’s wellbeing, during a speech earlier this month that the BoE published today.
But the chief economist said “social capital” – people’s working relationships – had been a “casualty of the crisis”.
Haldane said he personally “feels acutely” the loss of social interaction. He said he missed “chance conversations, listening to very different people with very different lived experiences, the exposure to new ideas and experiences”.
The Threadneedle Street economist also said there were pros and cons when it came to creativity.
“Home-working can starve us of many of creative raw ingredients – the chance conversation, the new person or idea or environment,” he said.
Yet he said the peace and quiet of home working has allowed many people to focus better on creative tasks.
End of commute boosts happiness
Yet Haldane said there are many benefits to working from home. Chief among these is the end of the commute.
One study showed that an additional 20 minute commute reduced people’s well-being as much as a 19 per cent pay cut.
This was one reason that “happiness at work seems, despite all that, to have risen,” Haldane said.
Yet he warned this happiness may wane as people grow tired of the situation.
On the economic front, Haldane said there was evidence that the shift has hurt the UK’s productivity.
Yet he said that the overall economic hit has been counteracted by people working longer hours.
“Studies point to daily savings in commuting time of almost an hour. They also suggest around a third of that saved time has been spent working.”
Overall, Haldane said he was confident that the UK economy can handle the shift to home working. He said this was thanks to the “flexibility” of households and businesses.