People are going to spend up to 10% less in cities because of working from home, study says

New York outdoor dining
People dine at an outdoor Soho restaurant on March 21, 2021 in New York City.

  • Spending in major metro areas will drop by 5% to 10% because of working from home, UChicago researchers said.
  • A cutback in commuting will hit urban spending on food, shopping, and entertainment, they added.
  • This could lead to tax raises or job cuts in cities that are just recovering from the COVID-19 recession.
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The post-pandemic economy will look different from the one seen in February 2020. In a word, it will be emptier. Gone are the days of an office-based 9-to-5; instead, workplaces are rolling out plans for hybrid telecommuting and even fully remote work.

But where work-from-home will benefit Americans in reducing commute times and granting extra flexibility, nobody knows just how much it will hit the urban economies that used to support office workers in the before times. University of Chicago researchers have an idea, or at least an estimate.

The post-pandemic shift to work-from-home setups will decrease spending in major metropolitan areas by 5% to 10%, researchers Jose Maria Barrero, Nicholas Bloom, and Steven Davis said in a working paper published on Wednesday. The shortfall could even reach 13% in densely populated areas like Manhattan, the team added, citing their own survey data.

“As these workers cut back on commuting, they will spend less on food, shopping, personal services, and entertainment near workplaces clustered in city centers,” the economists said. “Central business districts will see considerably larger spending drops relative to the pre-pandemic levels.”

Such a spending drop would present a major challenge for cities looking to recover from the pandemic’s economic fallout. Consumer spending counts for roughly 70% of economic activity and is a particularly important economic driver in areas that faced strict lockdowns throughout the health crisis.

Retail sales – a popular gauge of Americans’ spending habits – surged to record highs last month as a new wave of stimulus checks and the relaxing of some economic restrictions boosted activity. The measure is expected to climb even higher in April, but as stimulus dries up, Americans’ spending will settle into a new normal.

Cities have little to counter a permanent drop in metro-area spending. Where the federal government can spend at a persistent and growing deficit, state and local authorities have to balance their budgets. The drop in spending forecasted by the team of economists could force cities to either lift taxes or cut spending and risk more economic harm.

What is challenging for urban economies could be a benefit to how good people are at their jobs. Widespread telecommuting is projected to lift productivity by 4.8%, according to the study. Half of those gains reflect savings in diminished commuting times.

Still, those likely to benefit from more remote work aren’t the ones who need the boost. Employer plans suggest that the extent of telecommuting will rise with education and earnings, the team said. The benefits of persistent work-from-home policies “will be broadly felt but flow mainly to the better educated and highly paid,” they added.

With economic data and experts warning of an uneven economic recovery, such disparities would only exacerbate the hiring and income gaps that plagued the country before the COVID-19 recession.

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How to get into 4 of the best law schools in the US, according to consultants, admissions officers, and students

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Applicants should have a clear vision on why they want to be a lawyer and be able to communicate that.

  • Yale, Columbia, UChicago, and Harvard are some of the most prestigious law schools in the world.
  • Each school values high test scores, letters of recommendation, and an honest personal statement.
  • Insider regularly interviews experts on how to get into your ideal law program. You can read it all by subscribing to Insider.

Attending law school is time-consuming and expensive, but if you end up in the right program, it could lead to a fulfilling and successful career.

For example, according to Yale Law School’s website, over 13,000 YLS alumni are leaders in their organizations – and a decade after graduating they almost unanimously express job satisfaction.

But to get into a top school, you’ll need more than just high test scores. Here are some tips and best strategies on how to get accepted into one of the best law schools in the country, according to people who’ve done it. 

Yale Law School

Yale Law School is the No. 1 law school in the US, according to US News & World Report, while the 2023 acceptance rate was a slim 7.3%.

Yale places high emphasis on obtaining letters of recommendation from professors who know you well and can personally evaluate aspects of your academic work. Something unique about the YLS admissions process is their faculty is heavily involved in selecting each class, so they might especially value strong academic letters. 

Read more: How to get into Yale Law School, the No. 1 program in the US

Columbia Law School

Columbia Law School is currently recognized as the fourth best law school in the US, trailing only Yale, Stanford, and Harvard (and tied with the University of Chicago). Of the more than 7,000 students who applied for the class of 2020, only about 16% were accepted.

Applicants to Columbia Law should pay extra attention to their personal statements. Use this as an opportunity to reveal who you really are and what you’re passionate about. Having strong reasons to be in New York City helps as well since it’s an integral part of the school, Timothy Knox, a law school admissions counselor, told Insider. 

Read more: Admissions consultants and recent graduates of Columbia Law share what it takes to get into the top 5 law school

UChicago Law School

UChicago Law School consistently ranks among the most prestigious graduate law programs in the world, with an acceptance rate of 18%. Unlike some of the other top schools, UChicago Law has an especially small class size, at just over 600 full-time students. (Columbia, which shares its No. 4 ranking, has double the number.)

The community prioritizes close faculty engagement and “the life of the mind.” Once you’ve taken your LSAT and applied, prepare for your interview by nailing your answer to the question, “Why UChicago?”

Read more: UChicago Law students and a dean of admissions explain how to nail your interview and personal statement to land a spot at the elite law school

Harvard Law School

In 2018, Harvard Law School – currently third in the rankings – offered admission to just 12% of applicants. In 2019, it made the shift to rounds of admission.

Per law school admissions coaching consultant Anna Ivey, “HLS admissions officers are very conscientious about recruiting minorities of various kinds: They want a diversity of people and geographic areas,” including veterans and older applicants. This means there’s no standard profile for an HLS student. Don’t be discouraged if you don’t fit what you think to be their ideal type of candidate.

Read more: How to get into Harvard Law School, according to the chief admissions officer, students, and admissions consultants

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