The Power of Proximity to Coworkers

Natalia Emanuel, Emma Harrington and Amanda Pallais

No 31880, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: How does proximity to coworkers affect training and productivity? We study software engineers at a Fortune 500 firm from 2019 to 2024, leveraging two shocks to proximity: (i) the office closures in 2020 and (ii) the subsequent return-to-office mandates in 2022 and 2023. In both cases, co-located teams experienced bigger changes in proximity than distributed ones, facilitating difference-in-differences designs. We find that sitting near teammates increases coding feedback by 18.3% and improves code quality. Gains are concentrated among less-tenured and younger employees, who are building human capital. However, there is a tradeoff: experienced engineers write less code when sitting near teammates. In national US data, we find evidence that the rise of remote work has had scarring effects on young college graduates. In remotable jobs, young graduates’ unemployment rate increased relative to older graduates’ post-pandemic (2022−2024) compared to pre-pandemic (2017−2019), a pattern we do not observe in non-remotable jobs.

JEL-codes: J16 J24 M15 M53 M54 O33 R23 (search for similar items in EconPapers)
Date: 2023-11
New Economics Papers: this item is included in nep-hrm and nep-lma
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