Work From Home: Who Gains and Who Does Not?

Pilar Yildirim, Marketing, The Wharton School

Abstract: A growing share of the U.S. labor market adapted remote work or work from home (WFH) practices following the COVID-19 pandemic of 2019. WFH stands to fundamentally alter the conditions of work for employees, while altering the practice of management for supervisors. On the one hand, WFH introduces flexibility in the working conditions of employees. Workers cite that the main reasons to prefer working from home are the ability to care for others, the comfort of the physical environment, the time savings from not commuting (Bloom et al 2022). On the management side, however, it is not clear if the benefits are as obvious. There is a preference for WFM for both workers and managers. The consequences of this shift, however, are not adequately studied. On the other hand, WFM brings along managerial challenges, most related about the observations of worker’s effort. Particularly, when work is generated as a team output, monitoring workers and determining who exerted effort and rightfully rewarding work create further challenges. On the other hand, working from home can quickly turn into shirking from home, since monitoring is not adequate in this environment. In this study, considering the benefits and costs of WFM, we consider two questions: (1) who has an incentive to work from home, (2) how is team coherence and work performance impacted when individuals work from home?