F.O.G. and Teleworking: Some Labor Economics of Covid-19

Abstract

FOG (« fear of going back to work ») is a new acronym reflecting workers stress to become contamined by COVID-19. In response, firms have been offering protections, extending teleworking as a way to continue to work during the pandemics. Leveraging a classical epidemiologic SIR model, we study how pandemics such as COVID-19 affect labor market, when the labor productivity is tied to the value of interactions, and under wage negotiations. Despite relatively schematic, our modelling highlights that workers participation during pandemics is dependent on reservation wages, and that the final dynamics are also critically dependent on a mix of health and wealth factors such as age, work interactions, workers power, and productivity of interactions. In general, teleworking may be a way to restore work participation, even if teleworking may be less productive, to the extent that the productivity gap can be compensated by a much higher protection of workers.