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Maybe 1/3 of the US labor force is working remotely now, due to covid-19. Will this persist? What do we know about the productivity of remote work, in normal times? A thread...
Let's start with Bloom, Liang, Roberts, and Ying (2015). This study is remarkable because one of the coauthors is the co-founder of a large Chinese travel booking company. https://nbloom.people.stanford.edu/sites/g/files/sbiybj4746/f/wfh.pdf
This let them run an actual experiment on remote work!
1. Solicit volunteers (249)
2. Half work from home 4 days/week (treatment); half work in the office (control)
3. See what happens over 9 months
1. Solicit volunteers (249)
2. Half work from home 4 days/week (treatment); half work in the office (control)
3. See what happens over 9 months
Relative to the control group, the home workers:
were 13% more productive
had a 50% lower attrition rate
Based on the results, the company rolled out policy company-wide.
were 13% more productive
had a 50% lower attrition rate
Based on the results, the company rolled out policy company-wide.
Another study: Sherman (2019) recruits 187 employees of a life-sciences company to work from home (WFH) more often on even-or-odd weeks of a four-week period.
https://pubsonline.informs.org/doi/10.1287/mnsc.2018.3237
https://pubsonline.informs.org/doi/10.1287/mnsc.2018.3237
This design lets each individual serve as their own control group. Sherman finds self-reported productivity is higher during WFH weeks. The gains are weaker for those who collaborate a lot (but there are no losses associated with WFH), but higher for working mothers.
In both cases, WFH was mixed with colocated work though. What about full-time WFH?
Choudhury, Foroughi, and Larson (2019) provide evidence on a program at the US patent office that allowed examiners to work from anywhere. https://www.hbs.edu/faculty/Pages/item.aspx?num=55312
Choudhury, Foroughi, and Larson (2019) provide evidence on a program at the US patent office that allowed examiners to work from anywhere. https://www.hbs.edu/faculty/Pages/item.aspx?num=55312
Patent examiners had access to a policy allowing them to WFH four days a week. As with the Bloom et al. study, CFL find workers using this program are more productive than colocated peers. But this isn't an experiment, so caution is warranted.
However, in 2011 a new policy allowed examiners to work-from-anywhere as much as they wanted. The program was oversubscribed, resulting in quasi-random assignment into the program among interested workers.
Remote workers in the work-from-anywhere program were 4.4% more productive than those in the standard work-from-home program (who were already more productive than colocated workers).
These studies have nice strategies to measure the causal impact of remote work. But call center operators, patent examiners, life-sciences... maybe these professions are unusually well-suited to remote work?
A few other pieces of evidence suggest yes and no.
A few other pieces of evidence suggest yes and no.
The tech sector seems well suited to remote work.
A 2019 internal study by google found no difference in the effectiveness, performance ratings, or promotions for teams and individuals whose work required remote collaboration. https://blog.google/inside-google/working-google/working-together-when-were-not-together/
A 2019 internal study by google found no difference in the effectiveness, performance ratings, or promotions for teams and individuals whose work required remote collaboration. https://blog.google/inside-google/working-google/working-together-when-were-not-together/
In the same year, Stripe made a large push into remote work, noting: “the technological substrate of collaboration has gotten shockingly good over the last decade” and "our remote employees have outperformed all expectations.” https://stripe.com/blog/remote-hub
But to the best of my knowledge, Monteiro, Straume, and Velento (2019) is the best pre-covid study of remote work across an entire economy. https://ideas.repec.org/p/nip/nipewp/14-2019.html
They use a 2011-2016 survey of a representative sample of Portuguese firms. But they don't have info on how many people actually work remotely. Instead they use a measure of remote capability (firm makes apps available remotely x share of workers using computer).
If you just naively compare firms with remote capability to those without, going from a 0->100% remote capable workforce is associated with 15% higher productivity.
But maybe high productivity firms are just more likely to offer remote work.
But maybe high productivity firms are just more likely to offer remote work.
So they restrict attention to the subset of firms (394 or 6-8% of sample) that change remote capabilities over their observation period and see the impact on those firms (i.e., they include firm-specific fixed effects).
Now they find going from a 0 -> 100% remote capable workforce DECREASES productivity by 7-10%. But this conceals a lot of variation.
It turns out the negative impact of remote capability is concentrated in lower-performing firms: mid-size and large firms do not see reduction in productivity when they switch to remote work; neither do exporters; neither do firms with high-skilled employees.
In fact, firms that do R&D increase their productivity by 9% when they go from 0 to 100% (potentially) remote.
My take-away? For a lot of firms and industries, remote work works!
But we need more studies, especially longer-term and on full-time remote work. I suspect we'll get them soon.
But we need more studies, especially longer-term and on full-time remote work. I suspect we'll get them soon.
