Home Sweet Home: How Much Do Employees Value Remote Work?

Zoe B. Cullen, Bobak Pakzad-Hurson and Ricardo Perez-Truglia

No 33383, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We estimate the value employees place on remote work using revealed preferences in a high-stakes, real-world context, focusing on U.S. tech workers. On average, employees are willing to accept a 25% pay cut for partly or fully remote roles. Our estimates are three to five times that of previous studies. We attribute this discrepancy partly to methodological differences, suggesting that existing methods may understate preferences for remote work. Because of the strong preference for remote work, we expected to find a compensating wage differential, with remote positions offering lower compensation than otherwise identical in-person positions. However, using novel data on salaries for tech jobs, we reject that hypothesis. We propose potential explanations for this puzzle, including optimization frictions and worker sorting.

JEL-codes: J24 J31 M54 (search for similar items in EconPapers)
Date: 2025-01
New Economics Papers: this item is included in nep-dcm, nep-hrm and nep-lma
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