IDEAS home Printed from https://ideas.repec.org/a/ozl/journl/v25y2022i2p193-214.html
   My bibliography  Save this article

A simple model of working from home

Author

Listed:
  • Mabel Andalon

    (Productivity Commission)

  • Matthew Jones

    (Productivity Commission)

Abstract

The paper describes a simple model of working from home. The model extends the standard consumption vs unpaid hours decision faced by individuals to make labour a location-specific good. We drew three main insights from the model: (1) increased access to working from home increases labour supply as some time saved from commuting is diverted to working hours; (2) the commute is a major cost which is borne entirely by the individual who supplies labour — this cost drives much of the welfare improvements that occur when working from home is permitted and; (3) paying a different wage to office vs home-based labour yields an efficient outcome. However, when wages cannot vary by location, firms and workers will likely make adjustments over time to make the distribution of work more efficient; such as by investing in home-based work technologies, or by developing processes to make distributed work more productive.

Suggested Citation

  • Mabel Andalon & Matthew Jones, 2022. "A simple model of working from home," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 25(2), pages 193-214.
    • Handle: RePEc:ozl:journl:v:25:y:2022:i:2:p:193-214
    as

    Download full text from publisher

    File URL: http://ftprepec.drivehq.com/ozl/journl/downloads/AJLE252jones.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Alfred Michael Dockery & Sherry Bawa, 2014. "Is working from home good or bad work? Evidence from Australian employees," Bankwest Curtin Economics Centre Working Paper series WP1402, Bankwest Curtin Economics Centre (BCEC), Curtin Business School.
    2. Jensen, Nathan & Lyons, Elizabeth & Chebelyon, Eddy & Bras, Ronan Le & Gomes, Carla, 2020. "Conspicuous monitoring and remote work," Journal of Economic Behavior & Organization, Elsevier, vol. 176(C), pages 489-511.
    3. Nicholas Bloom & James Liang & John Roberts & Zhichun Jenny Ying, 2015. "Does Working from Home Work? Evidence from a Chinese Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(1), pages 165-218.
    4. Groen, Bianca A.C. & van Triest, Sander P. & Coers, Michael & Wtenweerde, Neeke, 2018. "Managing flexible work arrangements: Teleworking and output controls," European Management Journal, Elsevier, vol. 36(6), pages 727-735.
    5. James Lennox, 2020. "More working from home will change the shape and size of cities," Centre of Policy Studies/IMPACT Centre Working Papers g-306, Victoria University, Centre of Policy Studies/IMPACT Centre.
    6. Michael Gibbs & Friederike Mengel & Christoph Siemroth, 2023. "Work from Home and Productivity: Evidence from Personnel and Analytics Data on Information Technology Professionals," Journal of Political Economy Microeconomics, University of Chicago Press, vol. 1(1), pages 7-41.
    7. A.M. Dockery & Sherry Bawa, 2014. "Is Working from Home Good Work or Bad Work? Evidence from Australian Employees," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 17(2), pages 163-190.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Emilio Bisetti & Benjamin Tengelsen & Ariel Zetlin‐Jones, 2022. "Moral Hazard In Remote Teams," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(4), pages 1595-1623, November.
    2. Alfred Michael Dockery & Sherry Bawa, 2015. "When two worlds collude: working from home and family functioning," Bankwest Curtin Economics Centre Working Paper series WP1504, Bankwest Curtin Economics Centre (BCEC), Curtin Business School.
    3. Prager, Fynnwin & Rhoads, Mohja & Martínez, Jose N., 2022. "The COVID-19 economic shutdown and the future of flexible workplace practices in the South Bay region of Los Angeles County," Transport Policy, Elsevier, vol. 125(C), pages 241-255.
    4. Alfred M. DOCKERY & Sherry BAWA, 2018. "When two worlds collude: Working from home and family functioning in Australia," International Labour Review, International Labour Organization, vol. 157(4), pages 609-630, December.
    5. Michał T. Tomczak & Elias Mpofu & Nathan Hutson, 2022. "Remote Work Support Needs of Employees with Autism Spectrum Disorder in Poland: Perspectives of Individuals with Autism and Their Coworkers," IJERPH, MDPI, vol. 19(17), pages 1-13, September.
    6. Vij, Akshay & Souza, Flavio F. & Barrie, Helen & Anilan, V. & Sarmiento, Sergio & Washington, Lynette, 2023. "Employee preferences for working from home in Australia," Journal of Economic Behavior & Organization, Elsevier, vol. 214(C), pages 782-800.
    7. Yugang He, 2022. "Home Production: Does It Matter for the Korean Macroeconomy during the COVID-19 Pandemic?," Mathematics, MDPI, vol. 10(12), pages 1-12, June.
    8. Jaroslaw Morawski, 2022. "Impact of working from home on European office rents and vacancy rates," Zeitschrift für Immobilienökonomie (German Journal of Real Estate Research), Springer;Gesellschaft für Immobilienwirtschaftliche Forschung e. V., vol. 8(2), pages 173-188, October.
    9. Ro’i Zultan & Eldar Dadon, 2023. "Missing the forest for the trees: when monitoring quantitative measures distorts task prioritization," Working Papers 2319, Ben-Gurion University of the Negev, Department of Economics.
    10. Masayuki Morikawa, 2023. "Productivity dynamics of remote work during the COVID‐19 pandemic," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 62(3), pages 317-331, July.
    11. Janice C. dup Eberly & John dup Fernald, 2022. "Jackson Hole 2022 - Reassessing Economic Constraints: Potential Output (The Impact of COVID on Productivity and Potential Output)," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, August.
    12. Lina Vyas, 2022. "“New normal” at work in a post-COVID world: work–life balance and labor markets [An employee-focused human resource management perspective for the management of global virtual teams]," Policy and Society, Darryl S. Jarvis and M. Ramesh, vol. 41(1), pages 155-167.
    13. Essbaumer, Elisabeth, 2022. "Home Office is here to stay? Access to Home Office and Remote Work Potentials across Swiss Industries," Economics Working Paper Series 2213, University of St. Gallen, School of Economics and Political Science.
    14. Marie Boltz & Bart Cockx & Ana Maria Diaz & Luz Magdalena Salas, 2023. "How does working‐time flexibility affect workers' productivity in a routine job? Evidence from a field experiment," British Journal of Industrial Relations, London School of Economics, vol. 61(1), pages 159-187, March.
    15. Michele Mariani & Livia Ristuccia & Pasqualino Montanaro, 2023. "Propensity to work remotely in the Bank of Italy: a behavioural analysis," Questioni di Economia e Finanza (Occasional Papers) 753, Bank of Italy, Economic Research and International Relations Area.
    16. Mark Wooden, 2021. "Job Characteristics and the Changing Nature of Work," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 54(4), pages 494-505, December.
    17. Gavoille, Nicolas & Hazans, Mihails, 2022. "Personality Traits, Remote Work and Productivity," IZA Discussion Papers 15486, Institute of Labor Economics (IZA).
    18. Andrei Georgian & Militaru Gheorghe, 2022. "The influence of telework on organizational performance: Evidence from Romania," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 16(1), pages 887-893, August.
    19. Tanaka, Kiyoyasu, 2023. "What hinders digital communication? Evidence from foreign firms in Japan," Japan and the World Economy, Elsevier, vol. 66(C).
    20. Seng-Su Tsang & Zhih-Lin Liu & Thi Vinh Tran Nguyen, 2023. "Family–work conflict and work-from-home productivity: do work engagement and self-efficacy mediate?," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-13, December.

    More about this item

    Keywords

    Consumer Economics: Theory; Firm Behaviour: Theory Labour Demand and Supply;

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ozl:journl:v:25:y:2022:i:2:p:193-214. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sandie Rawnsley (email available below). General contact details of provider: https://edirc.repec.org/data/becurau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.