Steven Davis, Senior Fellow at the Stanford Institute for Economic Policy Research, joins Yahoo Finance Live to discuss the potential economic benefits of remote work setups, as fewer CEOs are prioritizing return-to-office mandates in 2024.

Davis says the trend of corporate calls to return to the office will restore a "normal relationship between labor market tightness and wage pressure." He notes employers have "benefited" from remote work's ability to expand candidate reach and moderate wage growth demands. However, he believes this dynamic is "largely played out" now.

As the January jobs report revealed more women are entering the US workforce, many American women still "disproportionately" bear household responsibilities like childcare. Davis points out "it's a lot easier to do that when you work from home." However, Davis notes anyone, male or female, will lean toward jobs with remote work options if household responsibilities are a priority.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

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Editor's note: This article was written by Angel Smith

Video Transcript

- Well, average hourly earnings saw a significant uptick in January in this latest jobs report, rising 0.6% from the previous month. Our next guest, though, says 40% of US business executives are offering remote work options as a way to moderate wage pressures.

Let's bring in Steven Davis, Stanford Institute for Economic Policy Research senior fellow, to discuss more. It's great to have you on today. You certainly look at this from a very interesting perspective. This comes as we have seen more and more companies, UPS the very latest this week, requiring employees to return to the office five days a week. Does that suggest that those wage pressures will ramp up even more?

STEVEN DAVIS: I don't think so. I think that we're probably more likely just to return to a normal relationship between labor market tightness and wage pressure. We've benefited-- we, as an economy and employers, have benefited in the past two or three years because the expansion of remote work-- the ability to hire labor in lower cost living areas, for example-- has helped employers moderate wage growth pressures. That's made it easier for the Fed to bring inflation down. That process is still ongoing. But I think it's largely played out.

- And something that we continue to see, women leading the January jobs gains, with 198,000 increase in employment versus 155,000 for men-- and looking at the data from the St. Louis Fed, steadily seeing more women participating in the labor force post-pandemic, how much of that can we attribute to some of the remote and hybrid work options? And what does that mean for the Fed and their decisions when you do have more women entering the workforce?