Does work from home improve matching in the labour market? First evidence from European countries

This work aims to test the hypothesis that a larger spread of WFH can improve the efficiency of matching between vacancies and job seekers in the labour market. Although this idea has recently been raised in literature, to the best of our knowledge this is the first empirical study to investigate it. The analysis is based on EU-LFS microdata on workers in European countries for the period 2010-2024. Firstly, we show evidence on the diffusion of WFH across European countries and on trends in cross country Beveridge curves since 2019. Secondly, we estimate the matching efficiency and its variations over time for each country, then we run panel regressions of matching efficiency over a number of control variables including a set of indicators of labour market mismatch. The results show that an increase in the share of WFH has a positive effect on matching, albeit only weakly significant and, as expected, limited to the post-pandemic years. Separate estimates for clusters of countries confirm our main result for countries where the share of workers working from home is above the median. Although our analysis provides only preliminary evidence without addressing the issue of endogeneity, it paves the way to promising future research.