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Home Sweet Home: How Much Do Employees Value Remote Work?

Author

Listed:
  • Zoë Cullen
  • Bobak Pakzad-Hurson
  • Ricardo Perez-Truglia

Abstract

We estimate the value employees place on remote work using revealed preferences in a high-stakes, real-world context, focusing on U.S. tech workers. On average, employees are willing to accept a 25% pay cut for partly or fully remote roles. Our estimates are three to five times that of previous studies. We attribute this discrepancy partly to methodological differences, suggesting that existing methods may understate preferences for remote work. Because of the strong preference for remote work, we expected to find a compensating wage differential, with remote positions offering lower compensation than otherwise identical in-person positions. However, using novel data on salaries for tech jobs, we reject that hypothesis. We propose potential explanations for this puzzle, including optimization frictions and worker sorting.

Suggested Citation

  • Zoë Cullen & Bobak Pakzad-Hurson & Ricardo Perez-Truglia, 2025. "Home Sweet Home: How Much Do Employees Value Remote Work?," NBER Working Papers 33383, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:33383
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    Cited by:

    1. F. Cerina & L. Deidda & S. Nobili, 2025. "Skill-biased remote work and incentives," Working Paper CRENoS 202505, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.
    2. Lambert, Peter John & Schindler, Yannick, 2026. "The Broken Ladder: AI, Remote Work, and Early-Career Hiring," CAGE Online Working Paper Series 808, Competitive Advantage in the Global Economy (CAGE).
    3. Brad Hershbein & Katherine Lim & Douglas A. Webber & Mike Zabek, 2026. "Local Labor Market Tightness and Job Quality: Evidence from Job Changers," Finance and Economics Discussion Series 2026-043, Board of Governors of the Federal Reserve System (U.S.).
    4. Simon Cordes & Max Müller, 2026. "Do Firms Know What Workers Want?," CRC TR 224 Discussion Paper Series crctr224_2025_739, University of Bonn and University of Mannheim, Germany.
    5. Peter John Lambert & Yannick Schindler, 2026. "The broken ladder: AI, remote work, and early-career hiring," CEP Discussion Papers dp2193, Centre for Economic Performance, LSE.
    6. Pawel Adrjan & Mária Balgova & Simon Jäger & Jonas Jessen & Jason Sockin, 2026. "Job Ads as Signals: Evidence from a Priced Amenity and Worker Beliefs," NBER Working Papers 35457, National Bureau of Economic Research, Inc.
    7. Collis, Manuela R. & Van Effenterre, Clémentine, 2025. "Workplace Hostility," IZA Discussion Papers 18302, IZA Network @ LISER.
    8. Jan Bietenbeck & Natalie Irmert & Therese Nilsson, 2026. "Individualism and working from home," Economic Inquiry, Western Economic Association International, vol. 64(2), pages 491-507, April.

    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management

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