Agency Theory and Work from Home

25 Pages Posted: 11 Feb 2019

See all articles by Dustin White

Dustin White

University of Nebraska at Omaha - Department of Economics

Date Written: March 2019


Wages for individuals working from home have converged toward, and even exceeded, those of office‐workers. I argue that these changes are driven by the ability of firms to monitor employees working from home. Using American Community Survey and Census data spanning 1980–2014, I find wage differentials have shifted from a 26 per cent penalty in 1980 to a 5 per cent premium in 2014. Furthermore, I find that higher wage variance (44 per cent greater in 1980) for home‐workers disappears by 2013. Changes in variance suggest that the falling cost of monitoring employee effort has made it less costly for firms to allow work from home. These findings support agency theory as a driver of the changes in wages and wage structure for individuals working from home.

Suggested Citation

White, Dustin, Agency Theory and Work from Home (March 2019). LABOUR, Vol. 33, Issue 1, pp. 1-25, 2019. Available at SSRN: or

Dustin White (Contact Author)

University of Nebraska at Omaha - Department of Economics ( email )

College of Business Administration
60th and Dodge Streets
Omaha, NE 68182
United States


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