Working from home doesn’t seem to affect productivity at all, Fed study says

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United States industries that are more adaptable to remote work haven’t seen a bigger boost — or decline — in productivity growth since 2020 compared to industries with more in-person work, according to new research from the Federal Reserve Bank of San Francisco.

While the shift toward remote-work arrangements has reshaped society in ways that will continue to evolve, there is “little evidence in industry data that the shift to remote and hybrid work has either substantially held back or boosted the rate of productivity growth,” San Francisco Fed economists led by John Fernald said in a study published Jan. 16 on the bank’s website.

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The researchers examined productivity trends in 43 industries — including chemical manufacturing, retail trade, and accommodation and food services — and assigned a “teleworkability” score based on the occupational mix of each industry and the share of jobs that can be done remotely.

“If remote work boosts productivity in a substantial way, then it should improve productivity performance, especially in those industries where teleworking is easy to arrange and widely adopted, such as professional services, compared with those where tasks need to be performed in person, such as restaurants,” Fernald and his co-authors wrote.

But after controlling for pre-pandemic trends by industry, they found little statistical relationship between productivity and the prevalence of remote work since the pandemic.

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The COVID-19 upheaval brought about a massive surge in telework. At its peak, more than 60 per cent of workdays were done remotely, compared to just five per cent before the pandemic. And while many U.S. companies have been pushing employees to return to the office, a hybrid model has so far endured, with about 30 per cent of paid workdays done remotely as of December 2023, according to the study.

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