When does remote work boost productivity?

March 13, 2021

The COVID-19 pandemic has forced many workers to work from home. Even before this emergency shift, there were societal calls for allowing workers location and time flexibility to achieve a better work-life balance (e.g. EU Directive 2019/1158). While there may be social benefits from working at home, research on the impacts of remote work on worker productivity and firm profitability shows contradictory results.

This paper studies the impact on worker productivity of a precondition for remote work, namely the possibility to access firm resources remotely. The paper uses data from the Eurostat’s Community Survey on ICT Usage and E-Commerce in Enterprises for Portugal during the 2011-2016 period. The survey data is matched with firm characteristics data from the Portuguese Integrated Business Accounts System creating a panel for 2011-2013 and 2016.

On average, remote access is negatively associated with productivity, but there is large heterogeneity across different types of firms, so the overall effect is not telling the whole story. The paper finds a positive association between remote access and productivity for firms that undertake R&D activities. Also, the findings suggest that the possibility of remote access is more likely to be harmful for productivity in non-exporting, small firms that do not do R&D, and that employ a workforce with a below-average skill level.

The main contribution of the analysis is related to the nature and richness of the data, which allows the authors to study the impact of firms’ remote access policies across a wide range of firms and industries. This is in contrast to much of the existing literature that has looked at non-random or selected samples. Importantly, the richness of the data enables the authors to analyze the possibility of heterogeneous effects of remote access along several different dimensions related to firm, worker, and job characteristics.

Click here to go to the paper by Natália P. Monteiro, Odd Rune Straume, and Marieta Valente.