Remote Work and the Corporate Hierarchy

Using population-wide Finnish registry data linking an administrative measure of work from home (WFH) to matched employer-employee records, we study how the allocation of WFH across the corporate hierarchy relates to wages and firm performance. Although remote workers on average earn higher wages, job-to-job transitions into WFH show that this premium largely reflects selection and heterogeneity: managers experience wage declines of approximately 3%, while middle- and lower-layer workers experience no comparable declines. Firm-level evidence shows that the performance consequences of WFH depend on its hierarchical location. Greater lower-layer WFH penetration is associated with weaker performance, whereas managerial WFH is not associated with worse firm performance. Since managerial WFH is associated with wage declines without evidence of lower firm performance, we interpret the decline as a conservative lower bound on managers’ valuation of WFH. Our results suggest that the value of WFH depends on where it is located inside the firm.