The COVID-19 pandemic generated a sharp increase in the number of remote jobs. The future of teleworking ultimately depends on its impact on workers’ productivity and well-being, yet the effect of remote working on productivity is not well understood: Some studies report an overall improvement in productivity whereas others document the opposite.
An explanation for this mixed evidence may lie in the transmission channels linking teleworking and productivity. In addition to direct mechanisms, such as the quality of ICT infrastructure or the change in managerial oversight, teleworking can affect productivity through well-being. On the one hand, remote work grants workers a larger autonomy, positively contributing to job satisfaction. It also reduces stress and fatigue associated with commuting. On the other hand, isolation and difficulties to separate work and private life can have the opposite effect. A recent study by the German trade union federation highlights both sides of the coin.
Overall, the balance of these pros and cons can greatly vary across individuals. The existing literature emphasizes the importance of gender and occupation for the productivity of teleworking, but a large share of this heterogeneity remains unexplained.
Conscientious workers are more productive when working from home
A new IZA discussion paper by Nicolas Gavoille and Mihails Hazans investigates the link between personality traits and workers’ productivity when working from home. The authors exploit a survey that provides measures of the “Big Five” personality traits for more than 1700 individuals in Latvia who worked only or mostly from home during the COVID-19 pandemic.
The results indicate that personality traits do matter for productivity in a remote work setup. In particular, conscientiousness plays an important positive role for productivity in teleworking and the willingness to work from home in the post-pandemic period. These relationships are statistically significant but also economically meaningful: Controlling for a battery of factors, the difference in probability to report a higher productivity from home than in office between individuals at the 75th percentile of the Conscientiousness score and those at the 25th percentile is 8.4 percentage points. This is a relatively large change given the average probability of 31%.
This important role of conscientiousness is in line with many previous studies documenting positive correlation between conscientiousness and key labor market outcomes. Similarly, Openness to Experience is also positively correlated with the productivity measure and willingness to work remotely post-pandemic.
Concerns about adverse self-selection seem unfounded
These results suggest that pro-teleworking employers will observe selection on personality traits into their workforce. Given that conscientiousness is desirable to all employers, while openness to experience is desirable at least to employers in growing and/or innovative firms and organizations, this selection is positive from the employer perspective, mitigating employers’ concern about adverse self-selection in flexible working arrangements.
Observing that highly conscientious workers are more willing to work from home, where they are more productive, suggests that firms do not need to exert a very strict control on their employees choosing to telework. This finding contrasts with the results of an earlier IZA paper from Belgium, claiming that individuals with a higher level of conscientiousness find job offers allowing for work remotely less attractive. The authors of the new study suggest that conscientious workers who already have (positive) experience with remote work may have found some of their prejudices overthrown.
In addition, their study uncovers a negative relationship between Extraversion and preference for teleworking, suggesting that employers practicing remote work should invest in socialization measures to compensate the negative effect of teleworking on well-being of more extravert workers.
Overall, the findings of this study suggest that a one-size-fits-all policy is unlikely to maximize firms’ productivity nor workers’ satisfaction. Individual workers’ characteristics are indispensable when estimating firm-level ability in switching to remote work.