The Impact of Return-to-Office Mandates on Equity Analysts

Abstract

Employing a difference-in-differences design, we investigate how brokerage firms' return-to-office (RTO) mandates affect analysts' forecast quality. We find that RTO mandates significantly enhance forecast accuracy, with stronger effects among younger, less experienced, and female analysts and those in Democratic-leaning states or under time pressure. The improvement is more pronounced for stocks less central to analysts' career priorities, indicating strategic effort allocation. Additionally, RTO mandates improve forecast timeliness. These results corroborate the hypothesis that in-office work boosts labor productivity. However, RTO mandates are associated with increased analyst turnover, though this effect fades by 2022-2023 as RTO policies become widespread.

Keywords: work from home, return to office, equity analysts, productivity

JEL Classification: G20, M54, O31, J4, J24