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