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Working Remotely? Selection, Treatment, and the Market for Remote Work

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Abstract
How does remote work affect productivity and how productive are workers who choose remote jobs? We estimate both effects in a U.S. Fortune 500 firm’s call centers that employed both remote and on-site workers in the same jobs. Prior to COVID-19, remote workers answered 12 percent fewer calls per hour than on-site workers. When the call centers closed due to COVID-19, the productivity of formerly on-site workers declined by 4 percent relative to already-remote workers, indicating that a third of the initial gap was due to a negative treatment effect of remote work. Yet an 8 percent productivity gap persisted, indicating that the majority of the productivity gap was due to negative worker selection into remote work. Difference-in-differences designs also indicate that remote work degraded call quality— particularly for inexperienced workers—and reduced workers’ promotion rates. In a model of the market provision of remote work, we find that firms were in a prisoner’s dilemma: all firms would have gained from offering comparable remote and on-site jobs, but any individual firm was loathe to attract less productive workers.

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  • Natalia Emanuel & Emma Harrington, 2023. "Working Remotely? Selection, Treatment, and the Market for Remote Work," Staff Reports 1061, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednsr:96277
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    Cited by:

    1. Masayuki Morikawa, 2024. "Productivity dynamics of work from home: Firm-level evidence from Japan," Journal of Evolutionary Economics, Springer, vol. 34(2), pages 465-487, April.
    2. Burdett, Ashley & Etheridge, Ben & Tang, Li & Wang, Yikai, 2024. "Worker productivity during Covid-19 and adaptation to working from home," European Economic Review, Elsevier, vol. 167(C).
    3. Minthiva Pitchaya-Auckarakhun, 2024. "The future of work: financial implications of remote and hybrid work models," Nowoczesne Systemy Zarządzania. Modern Management Systems, Military University of Technology, Faculty of Security, Logistics and Management, Institute of Organization and Management, issue 1, pages 13-38.

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    More about this item

    Keywords

    remote work; Work-from-home; worker productivity; Selection;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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