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

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  • Natalia Emanuel
  • Emma Harrington

Abstract

How does remote work affect productivity and how productive are workers who choose remote jobs? We decompose these effects in a Fortune 500 firm. Before COVID-19, remote workers answered 12 percent fewer calls per hour than on-site workers. After offices closed, the productivity gap narrowed by 4 percent, and formerly on-site workers' call quality and promotion rates declined. Even with everyone remote, an 8 percent productivity gap persisted, indicating negative selection into remote jobs. A cost-benefit analysis indicates savings in reduced turnover and office rents could outweigh remote work's negative productivity impact but not the costs of attracting less productive workers.

Suggested Citation

  • Natalia Emanuel & Emma Harrington, 2024. "Working Remotely? Selection, Treatment, and the Market for Remote Work," American Economic Journal: Applied Economics, American Economic Association, vol. 16(4), pages 528-559, October.
    • Handle: RePEc:aea:aejapp:v:16:y:2024:i:4:p:528-59
    DOI: 10.1257/app.20230376
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    More about this item

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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