Who Works From Home?

Work From Home (WFH) opportunities were dramatically broadened during, and after, the COVID-19 pandemic, but they existed pre-pandemic. Emanuel and Harrington (and ungated here) take advantage of when WFH went to voluntary to mandatory due to the pandemic to investigate which call center workers had selected WFH. Workers switching to WFH due to office closures during the pandemic were not as productive as before but those switching to remote work pre-pandemic were even less productive. The authors infer that those choosing WFH were adversely selected. Not only did they complete fewer calls, but they had higher customer hold times and more customer call-backs indicating that call quality suffered.

Interestingly, the voluntary nature of both pre- and post-pandemic WFH choices may limit its appeal.

Our model suggests that call-center firms were trapped in a prisoner’s dilemma with a low provision of remote work before the pandemic. All call-center firms would have been better off offering remote work jobs at similar wages as on-site ones — since the costs of remote work’s negative treatment effect would be offset by savings in office real-estate costs. Yet an individual firm hesitates to offer remote and on-site jobs at similar wages, due to concerns about attracting less productive workers into remote jobs.

Finally, the reduced worker productivity could be worth it due to offsetting reduced real estate costs. However,once you factor in the adverse selection, it may no longer make economic sense.