Mismatch in preferences for working from home – evidence from discrete choice experiments with workers and employers

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Date:
2023-10-01
Authors:
Piotr Lewandowski
Katarzyna Lipowska
Mateusz Smoter
Publication year:
2022
Publishing series:
IBS Working Paper
Publishing number:
WP 05/2022
Publications category:
Abstract:

We study workers’ and employers’ preferences for remote work, estimating the willingness to pay for working from home (WFH) using discrete choice experiments with more than 10,000 workers and more than 1,500 employers in Poland. We selected occupations that can be done remotely and randomised wage differences between otherwise identical home- and office-based jobs and between otherwise identical job candidates. We find that demand for remote work was substantially higher among workers than among employers. On average, workers would sacrifice 2.9% of their earnings for the option of remote work, especially hybrid WFH for 2-3 days a week (5.1%) rather than five days a week (0.6%). However, employers, on average, expect a wage cut of 21.0% from candidates who want to work remotely. This 18 pp gap in the valuations of WFH reflects employers’ assessments of productivity loss associated with WFH (14 pp) and the additional effort required to manage remote workers (4 pp). Employers’ and workers’ valuations of WFH align only in 25-36% of firms with managers who think that WFH is as productive as on-site work.

Additional information:

We thank Daniel Hamermesh, Sarra Ben Yahmed, Jose Barrero, Nick Bloom, Steve Davis, and the participants of the Remote Work Conference at Stanford, 2023 SOLE Annual Meeting, 2022 EALE Annual Conference, IAB LISER Conference on Labour Markets During and After the COVID-19 Pandemic, and the Ce2 workshop in Warsaw for useful comments. This paper was financially supported by the European Social Fund – Operational Programme Knowledge Education Development as a part of the “System for forecasting the Polish labour market” project. The European Social Fund bears no responsibility for the results and the conclusions, which are those of the authors. The usual disclaimers apply. All errors are ours.

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