https://macropaperwarehouse.com/authors/amanda-pallais/Amanda PallaisHugo -- gohugo.ioen-ushttps://macropaperwarehouse.com/papers/the-power-of-proximity-to-coworkers/https://macropaperwarehouse.com/papers/the-power-of-proximity-to-coworkers/<p>This paper studies how physical proximity to coworkers affects on-the-job training and productivity, using software engineers at a Fortune 500 online retailer observed from 2019 to 2024. The authors exploit two quasi-experimental shocks to proximity: the office closures of 2020, which eliminated proximity differentials that previously existed across team types, and the firm&rsquo;s subsequent return-to-office (RTO) mandates in 2022 and 2023, which restored proximity for co-located teams while leaving geographically-distributed teams apart. The core identification strategy is a difference-in-differences design comparing engineers whose teams were co-located in a single headquarters building to those whose teams were split across two buildings a ten-minute walk apart — a distinction that became immaterial once offices closed.</p>