Working from Home: Heterogeneous Effects on Hours Worked and Wages

Abstract

Working from home (WfH) has become much more common since the early 2000s.We exploit the German Socio-Economic Panel between 1997 and 2014 to investigate how such a work arrangement affects labour market outcomes and life satisfaction.We find that childless employees work an extra hour per week of unpaid overtime and report higher satisfaction after taking up WfH. Among parents, WfH reduces the gender gap in working hours and monthly earnings, as contractual hours increase more among mothers. Hourly wages, however, increase with WfH take-up among fathers, but not among mothers unless they change employer. This points to poorer bargaining outcomes for women compared to men when staying with the same employer. Controlling for selection into paid employment due to changes in unobserved characteristics or preferences does not affect the magnitude of the effects.

Telework and Time Use in the United States

“…In addition, staying connected outside of core work hours has been shown to produce social exclusion and create persistent problems at home so much as to necessitate coping strategies to create boundaries between work and family activities (Tietze 2002;Myrie and Daly 2009). Yet, Arntz, Yahmed, and Berlingieri (2019) found no significant effects of WFH on job or life satisfaction for working parents living in Germany.…”

“…Using an instrumental variables technique and U.S. data, Heywood, Seibert, and Wei (2007) found a positive wage differential for WFH but not for other workplace practices. Using the German Socio-Economic Panel and a fixed-effects model, Arntz, Yahmed, and Berlingieri (2019) show that women earned higher wages only if they switched into jobs that allowed WFH while men earned higher wages when they worked from home even if they remained with the same employer. They also found that the share of women in jobs permitting WFH expanded more rapidly between 1997 and 2014 than the share of men in jobs permitting work from home, and that mothers' labor force attachment increased with WFH.…”

The impact of working from home during COVID-19 on work and life domains: an exploratory study on Hong Kong

“…Bloom et al (2015) found job satisfaction to increase by working from home. WFH is also positively associated with family-life satisfaction (Arntz, Sarra, and Berlingieri 2019;Virick, DaSilva, and Arrington 2010). Kazekami (2020) studied the productivity of workers in Japan and discovered that telework increases life satisfaction.…”

Working from home and income inequality: risks of a ‘new normal’ with COVID-19

“…Even for the gender pay gap, although widely studied, there is not a clear evidence of the effect of WFH. Gariety and Shaer (2007), Bloom et al (2015), Arntz et al (2019), and Angelici and Profeta (2020) point out that WFH may reduce (or at least not increase) wage differences between male and female workers. On the other hand, Weeden (2005), Goldin (2014), and Bertrand (2018) display results in the opposite direction.…”