Working from Home: Implications for Developing Countries

In this chapter, we examine the feasibility and implications of working from home in developing countries. As a large number of countries have implemented social distancing policies, the share of employment which can be done at home will play a critical role in determining economic outcomes during the pandemic. We first show that the share of employment that can be done from home varies significantly with countries’incomes: in urban areas, this share is only about 20% in poor countries, compared to close to 40% in rich ones. This result is largely driven by the prevalence of self-employed workers in low-income countries. We further show that educational attainment, formal employment status and household wealth are positively associated with the possibility of working from home, reflecting the vulnerability of various groups of workers. We remark on the importance of rapidly identifying vulnerable workers across countries to design adequate policies to combat the negative employment impacts of Covid-19.