Going Remote? The Role of Labor Market Competition

50 Pages Posted: 8 Sep 2022 Last revised: 11 Sep 2022

See all articles by Charles (Chad) Ham

Charles (Chad) Ham

Indiana University - Kelley School of Business

Rebecca N. Hann

University of Maryland - Robert H. Smith School of Business

Wenfeng Wang

City University of Hong Kong

Jingwen Yang

University of Maryland - College Park

Date Written: August 27, 2022

Abstract

Using a comprehensive sample of work-from-home (WFH) job postings, we examine (i) trends in employer preferences for remote workers both before and during the COVID-19 pandemic and (ii) the effect of labor market competition on firm decisions to allow their employees to work remotely. We document a gradual upward trend in WFH job postings from 2010 to 2019, followed by a sharp increase in 2020 and 2021, precipitated by the pandemic. Consistent with firms responding to peer competition in the labor market, we find that employers are more likely to offer remote work when a larger proportion of their peers already do so. This effect is more pronounced after the onset of the COVID-19 pandemic as well as in areas with a higher cost of living or where women play a greater economic role in the workforce. Our results suggest that competition for talent in the labor market plays an important role in shaping organizations’ remote work strategies, especially when employee demand for workplace flexibility is high.

Keywords: Work From Home, Remote Work, Human Capital, Labor Market Competition, Job Postings

Suggested Citation

Ham, Charles and Hann, Rebecca N. and Wang, Wenfeng and Yang, Jingwen, Going Remote? The Role of Labor Market Competition (August 27, 2022). Available at SSRN: https://ssrn.com/abstract=4201819 or http://dx.doi.org/10.2139/ssrn.4201819

Charles Ham

Indiana University - Kelley School of Business ( email )

1309 East Tenth Street
Indianapolis, IN 47405-1701
United States

Rebecca N. Hann (Contact Author)

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742-1815
United States

Wenfeng Wang

City University of Hong Kong ( email )

83 Tat Chee Avenue
Kowloon
Hong Kong

Jingwen Yang

University of Maryland - College Park ( email )

College Park, MD 20742
United States

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