Does Remote Work Improve or Impair Firm Labour Productivity? Longitudinal Evidence from Portugal

52 Pages Posted: 20 Dec 2019

See all articles by Natália P. Monteiro

Natália P. Monteiro

University of Minho - Economic Policies Research Unit (NIPE)

Odd Rune Straume

University of Minho - Economic Policies Research Unit (NIPE); CESifo (Center for Economic Studies and Ifo Institute)

Marieta Valente

University of Minho - Department of Economics

Date Written: 2019

Abstract

Whether or not the use of remote work increases firm labour productivity is theoretically ambiguous. We use a rich and representative sample of Portuguese firms, and within-firm variation in the policy on remote work, over the period 2011-2016, to empirically assess the causal productivity effect of remote work. Our findings from estimations of models with firm-fixed effects suggest that the average productivity effect of allowing remote work is significantly negative, though relatively small in magnitude. However, we also find a substantial degree of heterogeneity across different categories of firms. In particular, we find evidence of opposite effects of remote work for firms that do not undertake R&D activities and for firms that do, where remote work has a significantly negative (positive) effect on labour productivity for the former (latter) type of firms. Negative effects of remote work are also more likely for small firms that do not export and employ a workforce with a below-average skill level.

Keywords: remote work, firm labour productivity, panel data

JEL Classification: D240, L230, M540

Suggested Citation

Monteiro, Natália P. and Straume, Odd Rune and Valente, Marieta, Does Remote Work Improve or Impair Firm Labour Productivity? Longitudinal Evidence from Portugal (2019). CESifo Working Paper No. 7991, Available at SSRN: https://ssrn.com/abstract=3507262

Natália P. Monteiro (Contact Author)

University of Minho - Economic Policies Research Unit (NIPE) ( email )

Campus de Gualtar
Braga, 4710-057
Portugal

Odd Rune Straume

University of Minho - Economic Policies Research Unit (NIPE) ( email )

Campus de Gualtar
Braga, 4710-057
Portugal

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Marieta Valente

University of Minho - Department of Economics ( email )

Braga 4710-057
Portugal

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