America’s productivity boom started before AI, and a Stanford economist who decoded the Great Resignation says working from home is the reason why

The American worker is on a productivity tear and it may have more to do with a surge in working from home than the effects of AI, according to a Stanford economist. For the past five years, the output for non-farm businesses has increased by a sizable 2% per year, The Economist reported citing statistics from the Bureau of Labor Statistics. This is a marked increase from the 1% productivity growth per year that defined most of the 2010s, and a trend that has taken even Federal Reserve Chairman Jerome Powell by surprise. “I never thought I’d see this many years of really high productivity,” Powell said in a March press conference. Yet, while the hype around AI over the past several years makes it a logical candidate for the main driver behind the productivity boom, Nicholas Bloom, a Stanford economics professor who is known for explaining the Great Resignation of the early 2020s, says it’s more likely work-from-home policies since the pandemic are fueling the trend. In trials, researchers found working from home has led to increased productivity because workers are saving time on commuting and general office time wasting. Bloom wrote in a post on LinkedIn earlier this week that working from home supports business creation and increases the labor supply by allowing more people to participate in the workforce. In an email to Fortune, Bloom also noted the data show “a clear post-2020 surge in productivity growth exactly when WFH [work from home] ramped up.” Still, large companies are increasingly moving away from work-from-home and flexible work policies. Since the start of the year, Home Depot, Instagram, and automaker Stellantis have forced employees back to the office five days a week. They join Amazon, the new No. 1 company on the Fortune 500, which started its five-day in-office requirement last year. In total, employees at more than half of Fortune 100 companies are required to work fully in-office, according to a report by real estate company Jones Lang LaSalle