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The Evolution of Working from Home

Working from home rose five-fold from 2019 to 2023, with 40% of US employees now working remotely at least one day a week. The productivity of remote work depends critically on the mode. Fully remote work is associated with about 10% lower productivity than fully in-person work. Challenges with communicating remotely, barriers to mentoring, building culture and issues with self-motivation appear to be factors. But fully remote work can generate even larger cost reductions from space savings and global hiring, making it a popular option for firms. Hybrid working appears to have no impact on productivity but is also popular with firms because it improves employee recruitment and retention. Looking ahead we predict working from home will continue to grow because of the expansion in research and development into new technologies to improve remote working. Hence, the pandemic generated both a one-off jump and a longer-run growth acceleration in working from home.

Jose Maria Barrero
Nicholas Bloom
Steven J. Davis
Publication Date
July, 2023