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Productivity at its Highest at an Intermediate Intensity of Work from Home

Author

Listed:
  • Kangasharju, Aki
  • Kauhanen, Antti
  • Pajarinen, Mika
  • Rouvinen, Petri

Abstract

We examine the relationship between remote work intensity and labor productivity using a survey of Finnish business leaders conducted in late 2024. The results show a positive but complex relationship between remote work and productivity, which is characterized by an inverted U-shape indicating that moderate levels of remote work are associated with the highest levels of productivity. Thus, a hybrid work model, combining on-site and remote work, is optimal for many companies. Management’s involvement in deciding the location of work and establishing clear remote work policies has an independent positive effect on productivity. The productivity effects of remote work are tied to companies’ and employees’ specific circumstances. Therefore, a company should not allow itself to fall into a random or accidental remote work situation. Instead, management and employees should continuously seek to optimize remote work arrangements for the long-term success of the company. At the very least, discussing the extent and ground rules of remote work should not be taboo.

Suggested Citation

  • Kangasharju, Aki & Kauhanen, Antti & Pajarinen, Mika & Rouvinen, Petri, 2025. "Productivity at its Highest at an Intermediate Intensity of Work from Home," ETLA Brief 154, The Research Institute of the Finnish Economy.
    • Handle: RePEc:rif:briefs:154
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    More about this item

    Keywords

    Remote work; Work from home; Labor productivity; Finland; Firm-level analysis;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J29 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Other
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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