Digitalization and the new geography of work

Krause, Simon (2025): Digitalization and the new geography of work: the impact of broadband and remote work on real estate and consumer spending. Dissertation, LMU München: Faculty of Economics

Abstract

This dissertation studies how two major technology shocks – broadband Internet and remote work – reshape the spatial distribution of economic activity. In four self-contained chapters, I empirically analyze the effects of the new geography of work on urban and regional economic outcomes in Germany. Using innovative, large-scale data and state-of-the-art microeconometric methods, I provide causal evidence on four key effects. The first essay shows that high-speed broadband Internet availability significantly increases rural real estate prices, reflecting its economic value to households. However, we find that broadband subsidies aimed at closing the rural-urban divide are often fiscally ineffective. Shifting from broadband to remote work, the next three essays explore its spatial effects on cities. The second essay finds that higher WFH adoption among residents leads to reduced mobility but increased local consumer spending, indicating shifts in economic activity. The third essay examines urban housing markets, showing that WFH decreases both the price premium for central locations and spatial inequality in housing costs within cities. Finally, the fourth essay studies office real estate, finding that WFH-intensive industries downsize office space, move toward higher-quality buildings, and relocate closer to city centers. These findings highlight distinct spatial patterns: While remote work decentralizes housing demand and consumer spending, it induces a centralization effect in office real estate. This dissertation extends prior U.S.-focused research with evidence from Germany, where denser cities, stronger public transit networks, and different land-use policies create different spatial dynamics. By examining how digitalization reshapes labor markets, real estate, and economic geography, my dissertation adds to the urban and regional economics literature. The results offer insights for navigating the future of cities and labor markets in the digital age.

• Item Type: Theses (Dissertation, LMU Munich)
• Keywords: Digitalization, economic geography, remote work, real estate, consumer spending
• Subjects: 300 Social sciences; 300 Social sciences > 330 Economics
• Faculties: Faculty of Economics
• Language: English
• Date of oral examination: 30. June 2025
• 1. Referee: Falck, Oliver
• Signature of the printed copy: 0001/UMC 31444