21st century economic development: An update on remote work and household income

This study replicates Gallardo and Whitacre’s (2018) finding that remote work was positively associated with median household income using 2020–2024 American Community Survey data at the Census tract level. The COVID-19 pandemic dramatically accelerated remote work, with the share of workers primarily based at home rising from 5.2% (pre-pandemic) to 15.1% by 2024. This sharp increase warrants an updated examination of this relationship. Using Ordinary Least Squares and Spatial Durbin Error Models (SDEM), we estimate the direct and spillover effects of remote work on median household income while controlling for demographic, educational, industrial, and broadband access variables. Results confirm that remote work retains a positive association with household income nearly a decade later. Notably, the spillover effects from neighboring tract wage-and-salary remote workers increased substantially — a finding with meaningful implications for regional economic development policy. New to this study, industry-specific remote work variables reveal considerable heterogeneity. Finance, insurance, and real estate remote workers generate the strongest direct and spillover income effects, while remote workers in educational services and health care are associated with negative income effects and spillovers. Despite significant federal broadband investments during this period, the digital divide index maintains a persistently negative association with income across all regions, underscoring the continued importance of broadband affordability and adoption alongside infrastructure deployment. These findings are consistent with the view that remote work remains a viable component of economic development strategy, though causal interpretation requires further research.