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

Natalia Emanuel and Emma Harrington

No 1061, Staff Reports from Federal Reserve Bank of New York

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.

Keywords: remote work; Work-from-home; worker productivity; Selection (search for similar items in EconPapers)
JEL-codes: J24 L23 L84 M54 (search for similar items in EconPapers)
Pages: 97
Date: 2023-05-01
New Economics Papers: this item is included in nep-eff, nep-hrm and nep-lma
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Citations: View citations in EconPapers (4)

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