America’s Productivity Boom Predates AI—And Working From Home Is a Major Driver, Says Stanford Economist
The American economy is experiencing a notable productivity surge, and a leading Stanford economist argues that the rise of remote and hybrid work—rather than artificial intelligence—deserves much of the credit.
For the past five years, non-farm business productivity has grown at an annual rate of about 2%, according to Bureau of Labor Statistics data cited by *The Economist*. That’s a significant step up from the roughly 1% average annual growth that prevailed throughout most of the 2010s. The trend has even caught the attention of Federal Reserve Chair Jerome Powell.
“I never thought I’d see this many years of really high productivity,” Powell remarked at a March press conference.
While AI has received much of the spotlight, **Nicholas Bloom**, a Stanford economics professor renowned for his research on the Great Resignation, points to post-pandemic work-from-home (WFH) policies as the more immediate catalyst.
Bloom notes that rigorous studies show remote work boosts productivity by eliminating commute times and reducing office distractions. In a recent LinkedIn post, he highlighted how WFH also supports new business formation and expands the labor supply by enabling more people—particularly caregivers and those in rural areas—to participate in the workforce. In an email to *Fortune*, Bloom emphasized that the data reveal “a clear post-2020 surge in productivity growth exactly when WFH ramped up.”
The Shift Back to the Office
Despite this evidence, many large companies are scaling back flexible arrangements. Since the beginning of 2026, Home Depot, Instagram, and Stellantis have joined Amazon in requiring employees to work fully in-office five days a week. More than half of Fortune 100 companies now mandate full in-office schedules, according to real estate firm Jones Lang LaSalle.
Corporate leaders often cite the benefits of in-person collaboration, a point Bloom acknowledges. However, he argues that forcing a full five-day return is often counterproductive and frequently driven by either impending layoffs or the personal preferences of (typically older, male) CEOs.
Bloom advocates for a **hybrid model**—two days in the office and three days remote—as the sweet spot. Employees can handle emails, administrative tasks, and routine meetings from home, reserving in-office time for high-value collaboration, mentoring, and culture-building.
“Coming into the office does absolutely help with collaboration, mentoring and culture,” Bloom said, “but you don’t need to be in every day to achieve that.”
He also warns that frequently changing policies creates unnecessary disruption. “Going from three days in person to five days in person, for example, generates huge anger, churn and disruption.”
The AI Factor
Although generative AI tools have proliferated since ChatGPT’s debut in 2022, their workplace impact remains limited so far. As of April 2026, Gallup found that half of employed Americans use AI in their jobs a few times a year, while only 13% use it daily.
Powell has noted that AI will “certainly contribute” to future productivity gains. A St. Louis Fed study estimated that time savings from generative AI could eventually deliver a roughly 1.1% boost to aggregate productivity.
For now, however, the timing aligns more closely with the widespread adoption of remote work than with AI’s still-nascent integration into daily workflows.