Working from Home, Worker Sorting and Development
A growing literature explores the impact of home-based versus office-based work. Differences in productivity may arise due to a treatment effect of the office or from workers with different abilities sorting into office or home work. We conduct an RCT in the data entry sector in India that exogenously allocates workers to the home or office. We find that the productivity of workers randomly assigned to working from home is 18% lower than those in the office. Two-thirds of the effect manifests itself from the first day of work with the remainder due to quicker learning by office workers over time. We find negative selection effects for office-based work: workers who prefer home-based work are 12% faster and more accurate at baseline. We also find a negative selection on treatment: workers who prefer home work are substantially less productive at home than at the office (27% less compared to 13% less for workers who prefer the office). These negative selection effects are partially explained by subgroups that likely face bigger constraints on selecting into office work, such as those with children or other home care responsibilities as well as poorer households.
We would like to thank the field research team at LEAD at KREA University, especially the office managers Kothandam D and Christopher Glan. We would like to thank Juan Gambetta Rossi, Dahyeon Jeong, Pratibha Joshi, Lipika Kapoor, Mridulya Narasimhan and Jiulei Zhu for their excellent research assistance. This project was made possible due Financial support of the ESRC and IGC. We would like to thank all the participants at IPA SME workshop, MIT, UCLA, the University of Bonn, and the 2022 Stanford Remote Work Conference for their valuable feedback. The experiment received IRB approval from MIT, UCLA, and IFMR. All errors are our own. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.