Is Remote Work Quietly Hurting the Next Generation of Workers?

Takeaway: Working in the same office boosts detailed mentorship and code quality for junior employees, but it requires senior staff to trade away some of their own direct output.

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Key Points

• Mentorship thrives in person: Sitting near teammates increases feedback on work by over 18%, helping junior employees build skills and write higher-quality code with fewer errors.

• Collaboration involves trade-offs: Mentoring takes time. Senior engineers write less code when sitting near colleagues because they spend more energy teaching and reviewing others.

• Shift in hiring strategy: As remote work makes on-the-job training harder, companies increasingly buy experienced talent rather than build it, contributing to higher relative unemployment among young college graduates in remotable fields.

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Why has it become harder for recent college graduates to secure entry-level office jobs? And why are companies and employees so deeply divided over return-to-office mandates?

While working from home saves commute time and allows experienced workers to churn out tasks uninterrupted, it may quietly alter how people learn on the job.

Economists traditionally estimate that a significant share of a worker's lifetime skills comes directly from colleagues. In an increasingly digital world, understanding whether virtual tools can replace face-to-face learning is critical for workers, managers, and policymakers.

To explore this, researchers Natalia Emanuel, Emma Harrington, and Amanda Pallais studied software engineers at a Fortune 500 online retailer from 2019 to 2024. They tracked team interactions through the 2020 office closures and the subsequent return-to-office mandates in 2022 and 2023.

By comparing fully co-located teams against teams split across different buildings or satellite offices, the researchers were able to isolate the causal impact of physical closeness on learning and productivity.

Findings

The research reveals that physical proximity meaningfully changes how coworkers interact. When offices were open, engineers on co-located teams received nearly 24% more feedback comments on their code than engineers whose teams were split across separate buildings—even when those buildings were just a ten-minute walk apart.

Once offices closed during the pandemic, this feedback advantage vanished. Using machine-learning tools to evaluate comment quality, the researchers found that the lost interactions were disproportionately the most valuable kind: detailed, actionable advice that explained the reasoning behind suggested changes. Over time, junior engineers who received in-person mentorship wrote higher-quality code, making significantly fewer costly errors and introducing fewer bugs.

However, providing this guidance creates a real trade-off. Senior engineers—who offer the bulk of feedback—wrote less code when sitting near their colleagues. When offices closed, senior engineers' direct coding output increased because they spent less time mentoring.

When firms find it harder to train junior staff in-house due to remote setups, they often adapt by hiring older, pre-trained workers. The authors found that when offices were closed, the retailer shifted toward hiring older engineers. Examining national U.S. labor market data, the authors observed a broader trend: since the rise of remote work, unemployment among young college graduates in remotable occupations has risen relative to older workers, a pattern not seen in non-remotable jobs.

Limitations and Context

While the national labor data aligns with these findings, readers should note that detailed productivity mechanisms were measured within a single large technology firm. Workplace dynamics may vary across industries and company cultures. Furthermore, national unemployment patterns are influenced by multiple economic factors beyond remote work practices.

Why It Matters

These findings show that remote work presents a fundamental tension between short-term output and long-term skill building. Working remotely can boost current output by letting experienced staff focus without distraction, but it may sacrifice future productivity by shrinking opportunities for junior staff to learn. For leaders and policymakers, ensuring effective early-career training in a flexible work environment remains an ongoing challenge.

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Learn More

• Title: The Power of Proximity to Coworkers

• Authors: Natalia Emanuel, Emma Harrington, and Amanda Pallais

• Journal: The Quarterly Journal of Economics

• Publication Year: 2026

• URL: https://academic.oup.com/qje/article/141/3/1825/8676722

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Econ Today Explains

Economic Concept: General vs. Specific Human Capital

Human capital refers to the collection of skills, knowledge, and experience that makes a worker productive. Economists broadly divide human capital into two types: specific and general.

• Specific human capital consists of skills tailored to a single employer, such as knowing how to navigate a company's internal software.

• General human capital includes skills that are valuable across many employers, such as writing clear software code or managing projects.

When experienced employees mentor junior colleagues, they help them build both types of capital. However, because general human capital makes workers attractive to competing firms, companies risk losing their investment if trained employees leave. In-person workplace connections often build the trust and social bonds necessary to support this informal training process.

This article was written by AI but reviewed by a real human.