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Agency Theory and Work from Home

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  • Dustin R. White

Abstract

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

  • Dustin R. White, 2019. "Agency Theory and Work from Home," LABOUR, CEIS, vol. 33(1), pages 1-25, March.
    • Handle: RePEc:bla:labour:v:33:y:2019:i:1:p:1-25
    DOI: 10.1111/labr.12135
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    Cited by:

    1. Barrero, Jose Maria & Bloom, Nick & Davis, Steven J., 2020. "Why Working From Home Will Stick," SocArXiv wfdbe, Center for Open Science.
    2. Rini Rachmawati & Ulfah Choirunnisa & Zat Ayuningsih Pambagyo & Yosi Atikah Syarafina & Rizki Adriadi Ghiffari, 2021. "Work from Home and the Use of ICT during the COVID-19 Pandemic in Indonesia and Its Impact on Cities in the Future," Sustainability, MDPI, vol. 13(12), pages 1-17, June.
    3. Sabrina Wulff Pabilonia & Victoria Vernon, 2022. "Telework, Wages, and Time Use in the United States," Review of Economics of the Household, Springer, vol. 20(3), pages 687-734, September.
    4. Pabilonia, Sabrina Wulff & Vernon, Victoria, 2020. "Telework and Time Use in the United States," IZA Discussion Papers 13260, Institute of Labor Economics (IZA).
    5. Pabilonia, Sabrina Wulff & Vernon, Victoria, 2023. "Remote Work, Wages, and Hours Worked in the United States," IZA Discussion Papers 16420, Institute of Labor Economics (IZA).

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