Introduction 

A quarter century ago, the nation was debating whether the introduction of “casual Fridays” would affect worker productivity. Five years after the COVID-19 pandemic, we are debating the impact of remote and telework. This paper looks specifically at the impact of government remote and telework arrangements. 

These questions are important because if in-person work results in less productive workers over many years, the state would be better off moving more work to a default in-person arrangement. If, on the other hand, productivity is unaffected or improved by teleworking (partial work-from-home) or remote work (entirely working from home arrangements), then society is better off with workers doing more telework and/or remote work.  

Our analyses indicates that while remote and telework by Colorado’s government workers was considered a necessary and desirable change during the COVID-19 pandemic, the state economy would reap more benefits if employees came back to in-person work. 

How Many Workers Engage in Remote or Telework?

Local policies on remote work for government workers are in flux. The City of Denver requires its employees work in the office three days a week, up from two days prior to 2022. Meanwhile, Colorado state employees have ranges of options for remote and hybrid work, and various counties and municipalities have their own policies. Jefferson County employees may work outside the state of Colorado itself for up to 30 consecutive calendar days, for example.

On January 20, 2025, the new presidential administration indicated a desire to have all federal employees return to in-person work. The administration directed all executive branch departments and agencies to terminate remote work arrangements and require employees to return to work in-person at their respective duty stations on a full-time basis. In an effort to move the policy forward, on January 28, 2025, the new administration offered an eight month severance package for workers opting not to continue employment with the federal government. Federal judges put that buyout offer on hold, but the administration continues to press forward. 

Some considerations need to be made regarding the federal order to return to in-person work. These include:

• The meaning of “respective duty location.” The most common duty location will most likely be a federal location in the state where the employee currently performs their remote or telework. Some workers may be required to move, however.  
•  How the directive will impact remote workers compared to telework employees. Presumably, telework employees who already report to an office location one or two times a week or month may simply report to that location. Remote workers who typically do all their work remotely may experience more disruption.
• In 2010, Congress addressed telework with the Telework Enhancement Act. Over the past 15 years, employees have been able to negotiate with their supervisors regarding working conditions. Given that federal government employee unions may not agree with the new presidential administration’s directive, grievance filings and other legal proceedings may impact the directive’s final scope. 

The Bureau of Labor Statistics (BLS) estimates total government employment in Colorado was 500,300 as of January 29, 2025. At the end of 2023, BLS estimated there were 55,200 federal employees in Colorado. As of December 2024, there were 150,500 Colorado state government employees (not full-time equivalent employees) and 292,500 people working for counties, cities, towns, and school districts. (Again, that number is not solely representative of full-time equivalent employees.) 

How many government employees work completely remotely, how many have some form of telework agreement, and how many work entirely in-person is not known. This report attempts to make reasonable estimates. 

CSI’s Analysis

Choices surrounding government remote work will have consequences for Colorado and the broader U.S. economy for one reason: the productivity that determines our standard of living. Small changes in productivity may be negligible on an annual basis, but measured over 50 years, the impact is massive. 

The CSI model suggests a net job increase from shifting employees to in-person work. While wages are assumed to remain unchanged, in-person collaboration enhances productivity, mentorship, and impromptu connections — key drivers of economic growth in cities where density fosters innovation and commerce. Additionally, accommodating more workers drives construction spending, boosting retail trade and real estate.

Outside research has confirmed that connectivity among members of the workforce leads to growth in U.S. cities and metropolitan areas, which generated 91% of all of the country’s economic growth in 2023. For instance, in Triumph of the City, author Edward Glaeser states that “cities generate economic growth because ideas spread more easily when smart people are physically close to one another.” 

Key Findings 

• In Colorado, an estimated 23,736 federal civilian, non-U.S. Postal Service employees perform some of their work remotely. An additional 5,520 employees work completely remotely.
•  An estimated 70,880 state and local government employees in Colorado work completely remotely.
• If telework/remote federal employees returned to work in Denver area federal buildings, it would create approximately 12,250 jobs and increase GDP by $2 billion.
• If telework/remote state employees returned to in-person work, it would create 11,734 jobs and increase GDP by $2.4 billion.
• If telework/remote local government employees in Colorado returned to in-person work, it would create 25,536 jobs and increase GDP by $3.2 billion.
• Cities would see added jobs and growth while non-cities would experience declines. 
• Across all government sectors — federal, state, and local — if a return to in-person work became standing policy, and the policy resulted in most of the current telework/remote jobs being done in city centers, CSI found:
• Colorado would see a 49,520 net increase in jobs. While not all of these jobs would be full-time equivalent jobs, the type of jobs created would be broad-based — ranging from hospitality and construction jobs to administrative and retail trade — because of a clustering effect. 
• Commercial office vacancy would fall by 21%. 

Background 

The debate regarding in-person versus remote/telework has enormous consequences for the future of the Colorado and U.S. economies. As Figure 1 demonstrates, remote work has grown in recent years in the United States.

According to the Survey of Working Arrangements and Attitudes, nationally the percentage of workdays where an employee worked fully remote was 28 in June 2023. The percentage of time spent working from home dropped after the COVID-19 pandemic and, since mid-2022, has stabilized into a slow trend toward more in-person work. 

The prevalence of remote and telework also varies widely across industry (Figure 2).  Higher earning fields that require higher education levels have higher concentrations of remote work. Colorado’s economy has higher shares of these kinds of jobs than other states, and as such, more remote workers.

Figure 1

Figure 2

Indeed, it is well known that Colorado has a flexible workforce. According to BLS, 16% of employees work at least some hours remotely. Nearly that many, 15.8%, perform all their work remotely. 

How does Colorado compare to other states on the remote work scale? Figure 3 compares the percentage of the workforce that works full-time remotely based on data from the BLS. As this figure shows, Colorado is a hotbed for remote work. 

Figure 3

Remote work growth has coincided with an increase in commercial office vacancy in central business districts. In the Denver metro area, the overall vacancy rate is 25% (Figure 4). The central business district vacancy rate is 33%. Both vacancy rates are well above the pre-2020 overall rate, which was sub-15%. As vacancy rates have risen, commercial rents also have increased.

The Denver metro area has 27 million square feet of vacant office space, more than enough to accommodate the estimated impact from more federal employees working in-person (25,900 plus 12,250 employees). At 150 square feet per returning employee, CSI estimates 5.7 million square feet of commercial office space would be consumed in the Denver metro area, resulting in a vacancy rate of only 21%. 

Given the weakness in the commercial real estate sector, a return to in-person would provide a much-needed boost to balance sheets. 

Figure 4

Trend Is Shifting Back Toward In-Person Work

Government has followed the private sector’s example with remote work trends, both in popularizing them five years ago and now in dialing them back. For instance, the State of Indiana is requiring all full-time employees to return to in-person work by the middle of 2025 and one of the largest employers in Colorado, Amazon, has eliminated remote work arrangements.  

Economic Impact from Federal Government 

The federal government has been shifting to more in-person work. Indeed, with direction from the new presidential administration, by mid-2025 some portion of Colorado’s federal workers will shift from remote to in-person at a location within Colorado. Others may move to Washington, D.C., some will retire, some will take jobs in other states, some will continue to work remotely, and still others will switch to employers outside the federal government and outside of Colorado.

Still, prior to the shift that is expected to happen mid-2025, around 43% of all federal employees were taking advantage of telework, meaning some portion of their work was performed remotely (Figure 5). About 10% were working completely remotely. 

Figure 5

The 55,200 federal employees in Colorado reported by the BLS excludes United States Postal Service and military employees. 

Other groups of employees are exempt from the new administration’s return-to-work directive as well, including immigration and national security employees. Using national personnel numbers for Immigration and Customs Enforcement (ICE), the U.S. Department of Homeland Security (DHS), and the Defense Intelligence Agency (DIA), CSI estimates there are around 4,900 completely remote federal employees in Colorado and around 21,000 federal telework employees in the state for a total of 25,900 fully or partially remote federal employees living in Colorado. 

Federal Office Locations in Colorado 

Because it is unknown how many of the estimated 25,900 federal civilian workers will return to in-person work at a location in the broader Denver/Denver South metro area, to a location outside that area, or to other locations across the country, CSI considered two scenarios to bracket the potential impact. 

Additionally, because a large portion of the square footage of federal government office building space is clustered in the Denver/Denver South areas, CSI also considered this area distinct from the rest of Colorado. Figure 6 provides at look at office building locations as reported by the General Services Administration. 

Figure 6 

Scenario 1: 11,054 Shift from Non-Denver/South Metro Area to the Denver/South Metro Area 

As noted above, CSI estimates there are 25,900 fully or partially remote federal government workers in Colorado. That number represents 47% of the federal civilian workforce in Colorado. 

Additionally, of the entire pool of federal workers estimated to be living in Colorado now (55,200), 23,520 are thought to be living in the non-Denver/South Metro area. The rest are likely in the Denver/South Metro area. 

Given those numbers, CSI estimates 11,054 federal civilian workers would shift from working outside of the Denver/South metro area to in-person work in the Denver/South metro area. The resulting estimated economic impact would be: 

• A net increase of 12,250 jobs, reflecting:
•  A 26,660 increase in the Denver Metro
• A 5,350 increase in Denver South
• A 19,760 decrease through the rest of Colorado
• A net increase in GDP of approximately $2 billion, reflecting:
• A $3.37 billion increase in the Denver Metro
• A $520 million increase in Denver South
• A $1.89 billion decrease throughout the rest of Colorado

Figure 7 

On the next page, Figure 8 describes jobs growth by category. The construction industry would experience the largest increase in employment: 2,050 jobs by 2028 as the Denver/Denver South metro area builds up capacity for a larger workforce. 

Other industries with notable job gains include professional, scientific, and technical services; state and local government; retail trade; real estate; food services and drinking places; administrative and support services; insurance carriers and related activities; and ambulatory healthcare services. 

Figure 8 

Economic Impact from State Government Workers Returning to In-Person Work 

The impact to Colorado and its metro areas/non-metro areas from a shift in the federal workforce suggests the economy would also experience a net positive impact if state government workers returned to in-person work. 

As noted above, BLS estimates there are 150,500 state government workers in Colorado, a portion of whom are full-time employees. According to the Joint Budget Committee of the Colorado Legislature, there are approximately 66,400 full-time equivalent state government employees in fiscal year 2024-2025. Presuming a return to in-person work would result in 16% percent of workers returning to the office — again, 16% is the percentage of all workers who currently do telework — CSI estimates:  

• A net increase of 11,734 jobs (Figure 9), reflecting:
•  A 21,081 increase in the Denver Metro
• A 4,739 increase in Denver South
• A 14,086 decrease throughout the rest of Colorado
• A net increase in GDP of approximately $2.4 billion (Figure 10), reflecting:
• A $3.41 billion increase in the Denver Metro
• A $741 million increase in Denver South
• A $1.7 billion decrease throughout the rest of Colorado

Figure 9 

Figure 10 

Economic Impact from Local Government Workers Returning to In-Person Work 

The BLS estimates 292,500 local government employees work in Colorado. (As noted previously, not all of these employees are full-time employees, however.) 

CSI was unable to locate an authoritative source for the percentage of local government workers who either telework or engage in remote work, therefore our model uses the BLS’s estimate that 16% of all workers are working remotely. With those numbers in mind, CSI estimates moving these workers from remote/telework to in-person work would result in: 

• A net increase of 25,536 jobs (Figure 11), reflecting: 
•  A 58,869 increase in city areas
• A 33,333 decrease in non-city areas
• A net increase in GDP of approximately $3.2 billion (Figure 12), reflecting:
• A $5.6 billion increase in city areas
• A $2.4 billion decrease in non-city areas

Figure 11

Figure 12 

Bottom Line

Overall, a shift toward more in-person work would be likely to boost net job creation and economic growth in the state as productivity rises and a revival of metro areas takes shape. The impact of such a move is not even, however. Losses in non-urban areas will offset the significant jobs and growth urban areas will enjoy.