Remote Work and Compensation Inequality

Gianni De Fraja, Jesse Matheson (), Paul Mizen, James Rockey, Shivani Taneja () and Gregory Thwaites ()
Additional contact information
Jesse Matheson: School of Economics, University of Sheffield, Sheffield S1 4DT, UK
Shivani Taneja: Department of Economics, University of Kent, Canterbury CT2 7NZ, UK
Gregory Thwaites: School of Economics, University of Nottingham, Nottingham NG8 1BB, UK

No 2024008, Working Papers from The University of Sheffield, Department of Economics

Abstract: This paper examines how the rise of working-from-home (WFH) affects compensation inequality. Using a novel survey, we find that the option to WFH is highly valued by workers (worth 8% of wages) but concentrated among higher earners, suggesting increased inequality. However, using a simple model where WFH and in-person workers are complements, we show that increased WFH leads to lower wages for WFH workers, potentially offsetting the benefits of WFH. Empirically, workers in WFH-capable occupations experienced 2–7% lower wage growth post-pandemic, consistent with the theory. Overall, we find no change in inequality but a substantial increase in compensation.

Keywords: Remote working; Work-from-home; Inequality; Compensation; Pandemic; Perks (search for similar items in EconPapers)
JEL-codes: H12 J01 R12 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2024-10
New Economics Papers: this item is included in nep-lab
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https://www.sheffield.ac.uk/economics/research/serps First version, October 2024 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:shf:wpaper:2024008

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