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New Study: Working From Home Reduces Productivity by 18%

S.J. Steinhardt
Published Date:
Aug 8, 2023


Employees who work remotely are less productive than their in-office counterparts, a new paper from the National Bureau of Economic Research has found.

In observing 235 data-entry workers in Chennai, India, who were divided into two groups — those working from the office and those working from home—over test periods of eight weeks, economists from the Massachusetts Institute of Technology (MIT) and the University of California, Los Angeles (UCLA) found that the productivity of workers randomly assigned to working from home was 18 percent lower than that of those in the office.

The researchers chose the Indian data-entry sector because it is one in which workers do not depend directly on the work of others in the organization, one in which productivity and effort can be captured by way of software on workers’ computers, and one in which a large share of production is home-based.

Both office workers and workers in the home environment had to work 35 hours per week, but office workers had to work from 9 am to 5 pm for five days a week, while home workers had flexibility regarding when to work (both within and across days). 

The researchers also found that workers who prefer working from home are 27 percent less productive at home than at the office, "while this gap is only 13 percent for workers who prefer office-based work." They concluded that this negative effect is partially explained by those who may be less able to choose office work, such as those with children or other home care responsibilities, as well as poorer households.

These types of findings have been cited by employers as a justification for demanding that workers return to the office. Most recently, video conferencing company Zoom, which became a verb in its own right due to its popularity during the pandemic-induced lockdown, has asked all employees within 50 miles of an office to work in person on a part-time basis, The New York Times reported.

“We believe that a structured hybrid approach—meaning employees that live near an office need to be on site two days a week to interact with their teams—is most effective for Zoom,” a company spokesperson told the Times. “We’ll continue to leverage the entire Zoom platform to keep our employees and dispersed teams connected and working efficiently.”

More employers, including tech companies such as Salesforce, Google and Amazon, are using various methods to get their employees back to their desks.

Nicholas Bloom, an economics professor at Stanford University who researches remote work, called Zoom’s decision “sensible,” The Washington Post reported. “If you are paying for office space and high Bay Area salaries it makes sense to operate on a hybrid schedule,” he tweeted, adding that most Zoom employees were already working this way.