Entrepreneurial Spawning from Remote Work

Using a novel firm-level measure of remote work based on employee Internet browsing, we show that workers whose employers adopted more remote work during the pandemic became more likely to start businesses. Conditional on leaving their jobs, workers were more likely to enter entrepreneurship rather than another wage job or non-employment. The marginally created businesses are higher quality than the average new firm. The effect is not driven by employee selection, preference changes, or forced turnover. Rather, remote work facilitates entrepreneurial experimentation by freeing up time and reducing employer monitoring, allowing workers to explore business ideas while retaining wage employment.