Why We Should Work Remotely and What the Data Says
Remote work changed from a rare perk to a common way of working almost overnight. Many people still ask whether working remotely is actually good for productivity and business results. Data from government sources and large surveys between the beginning of the pandemic and now give us clear answers. This article explains why remote work makes sense and what the data shows about productivity, costs, and worker outcomes.
How Remote Work Changed After the Pandemic
Before 2020, working from home was uncommon. Only about 6.5% of private sector workers worked mainly from home in 2019. During the COVID-19 pandemic, remote work became widespread across nearly every industry.
Data from the American Community Survey shows that remote work increased sharply between 2019 and 2021. Even after offices reopened in 2022, remote work remained higher than before the pandemic in almost every industry. This shows that remote work was not just a short-term response. It became a lasting change in how work is done.
What the Data Says About Productivity
One of the biggest concerns about remote work is productivity. Research results vary depending on the company, job type, and time period. Some early case studies during the pandemic found short-term productivity drops. Other firm-level experiments found small productivity gains.
When researchers looked at the bigger picture across 61 private sector industries, a clearer pattern appeared. Industries with larger increases in remote work also saw higher growth in total factor productivity. Total factor productivity measures how efficiently businesses turn labor and other inputs into output.
From 2019 to 2021, a one percentage point increase in remote work was linked to about a 0.08 percentage point increase in productivity growth. This positive relationship continued through 2022. Even after adjusting for pre-pandemic trends, the connection remained statistically significant.
Why Productivity Can Improve With Remote Work
Remote work does not just affect workers. It also changes how companies use resources. When employees work from home, businesses often reduce office space, utilities, and building-related costs.
Lower employee turnover also plays a role. Studies show that remote and hybrid work increases job satisfaction and reduces quitting. Lower turnover means companies spend less on hiring and training. Even if employee output stays the same, using fewer nonlabor inputs can raise overall productivity.
The data shows that industries with more remote work saw lower growth in unit costs, especially nonlabor costs like office buildings, services, and materials. These cost savings helped boost productivity during the pandemic period.
Output Grew Without More Labor
In many industries with the largest increases in remote work, output grew faster than labor input. This means companies produced more without increasing the number of hours worked.
The technology and professional services industries saw powerful results. Output increased while labor input stayed flat or even declined. This suggests that remote work helped businesses scale more efficiently in these sectors.
Did Workers Benefit Financially?
Higher productivity does not always mean higher pay. Data from the Bureau of Labor Statistics shows no clear link between remote work growth and increases in hourly compensation from 2019 to 2022.
However, workers still gained in other important ways. Remote workers avoided long commutes, saving time and money. Surveys show that remote workers save close to an hour per day by not commuting. Many also report lower stress and better mental and physical health.
These non-wage benefits matter, even if they do not appear directly on paychecks.
Why Remote Work Makes Sense Long-Term
The data shows that remote work did not harm productivity at the industry level. In fact, it contributed meaningfully to productivity growth during and after the pandemic. Businesses reduced costs, output increased, and workers gained flexibility and time savings.
Remote work is not perfect for every job or worker. Some roles require in-person collaboration, and onboarding can be harder for fully remote teams. But for many industries, the evidence shows that remote and hybrid work can be a sustainable and efficient model.
Conclusion
Remote work rose quickly during the pandemic and remains an important part of today’s labor market. Data across dozens of industries shows a positive link between remote work and productivity growth. Cost savings, lower turnover, and efficient use of resources all played a role.
While productivity gains did not translate directly into higher wages, workers benefited through time savings, flexibility, and improved well-being. Overall, the data supports remote work as a practical and effective way to work in the modern economy.
Sources:
Core government and academic sources
- Ruggles, Steven, Sarah Flood, Ronald Goeken, Megan Schouweiler, and Matthew Sobek. IPUMS USA: Version 12.0 dataset. Minneapolis, MN: IPUMS, 2022.
- Bloom, Nicholas, James Liang, John Roberts, and Zhichun Jenny Ying. “Does Working from Home Work? Evidence from a Chinese Experiment.” The Quarterly Journal of Economics 130, no. 1 (2015): 165 to 218.
- Bloom, Nicholas, Ruobing Han, and James Liang. “Hybrid Working from Home Improves Retention without Damaging Performance.” Nature 630 (2024): 920 to 925.
- Choudhury, Prithwiraj, Tarun Khanna, Christos A. Makridis, and Kyle Schirmann. “Is Hybrid Work the Best of Both Worlds? Evidence from a Field Experiment.” Forthcoming in Review of Economics and Statistics (2024).
- Gibbs, Michael, Friederike Mengel, and Christoph Siemroth. “Work from Home and Productivity: Evidence from Personnel and Analytics Data on Information Technology Professionals.” Journal of Political Economy Microeconomics 1, no. 1 (2023): 7 to 41.
- Emanuel, Natalia, and Emma Harrington. “Working Remotely? Selection, Treatment, and the Market for Remote Work.” American Economic Journal: Applied Economics 16, no. 4 (2024): 528 to 559.
- Fernald, John, Ethan Good, Huiyu Li, and Brigid Meisenbacher. “Does Working from Home Boost Productivity Growth?” FRBSF Economic Letter 2024 to 02 (2024).
- Dingel, Jonathan I., and Brent Neiman. “How Many Jobs Can Be Done at Home?” Journal of Public Economics 189 (2020): 104235.
- U.S. Bureau of Labor Statistics. Total Factor Productivity News Release. Data referenced is based on the March 2024 release.
- Eldridge, Lucy P., and Susan G. Powers. “The Importance of Output Choice: Implications for Productivity Measurement.” Monthly Labor Review (2023).
- Dalton, Michael, and Jeffrey A. Groen. “Telework during the COVID-19 Pandemic: Estimates Using the 2021 Business Response Survey.” Monthly Labor Review (2022).
- Decker, Ryan A., and John Haltiwanger. “Surging Business Formation in the Pandemic: Causes and Consequences?” Brookings Papers on Economic Activity, Fall 2023. Forthcoming (2024).
- Pabilonia, Sabrina Wulff, and Victoria Vernon. Remote Work, Wages, and Hours Worked in the United States. BLS Working Paper No. 565 (2024).
Notes that are not standalone sources
These items are statements in the source text, not separate publications you would cite on their own.
9. “Statistically significant at the 10 percent level.”
10. “No statistically significant association between excess labor productivity growth and rise in remote work.”
12. “Relationships significant except energy costs.”
Web sources and reports used in the second list
- Axios. “Remote work saved workers 72 minutes per day, study finds.” (January 24, 2023)
https://www.axios.com/2023/01/24/remote-work-saved-workers-72-minutes-per-day-study-finds - Proceedings of the National Academy of Sciences (PNAS). Article page for DOI: 10.1073/pnas.2304099120
https://www.pnas.org/doi/full/10.1073/pnas.2304099120 - WFH Research. Global Survey of Working Arrangements 2023 report (GSWA 2023)
https://wfhresearch.com/wp-content/uploads/2023/06/GSWA-2023.pdf - Digital.com. “Why People Want to Work From Home”
https://digital.com/why-people-want-to-work-from-home/ - Lemon.io. Article on startup savings from remote workers
https://lemon.io/blog/research-startups-save-up-to-10601000-yearly-on-remote-workers/ - FlexJobs. “Does Working Remotely Save You Money?”
https://www.flexjobs.com/blog/post/does-working-remotely-save-you-money/ - FlexJobs. “Losing talent to return to office mandates” survey insights
https://www.flexjobs.com/blog/post/losing-talent-to-return-to-office-mandates-insights-from-the-flexjobs-survey/ - FlexJobs. “Exploring the impact of remote work on mental health and the workplace”
https://www.flexjobs.com/blog/post/exploring-the-impact-of-remote-work-on-mental-health-and-the-workplace - Owl Labs. State of Hybrid Work 2023 report
https://owllabs.com/state-of-hybrid-work/2023 - Apartment List. Remote worker migration expected to persist in 2023
https://www.apartmentlist.com/research/remote-worker-migration-expected-to-persist-in-2023 - Select Software Reviews. Work from home hotspots in the USA
https://www.selectsoftwarereviews.com/blog/work-from-home-hotspots-usa - WFH Research. Updates report January 2024
https://wfhresearch.com/wp-content/uploads/2024/01/WFHResearch_updates_January2024.pdf - Forbes Advisor. Best cities for remote workers
https://www.forbes.com/advisor/business/best-cities-remote-workers/ - Pew Research Center. “About a third of U.S. workers who can work from home do so all the time.” (March 30, 2023)
https://www.pewresearch.org/short-reads/2023/03/30/about-a-third-of-us-workers-who-can-work-from-home-do-so-all-the-time/ - HR News. Article about 20 to 24 year olds and remote role applications
https://hrnews.co.uk/20-24-year-olds-are-the-age-group-least-likely-to-apply-to-remote-roles/ - Yahoo Finance. Article about bosses being fed up with remote work
https://finance.yahoo.com/news/bosses-fed-remote-4-main-193500794.html - FlexJobs. Remote work statistics
https://www.flexjobs.com/blog/post/remote-work-statistics/ - Upwork. Economist report PDF (2020)
https://content-static.upwork.com/blog/uploads/sites/6/2020/05/26131624/Upwork_EconomistReport_FWR_052020.pdf - Upwork Research. Report on the growth of remote teams
https://www.upwork.com/research/report-on-the-growth-of-remote-teams - Business Insider. Article on remote work and return to office trends (October 2023)
https://www.businessinsider.com/remote-work-from-home-return-to-office-americans-employment-wfh-2023-10 - ZipRecruiter. Work from home salary page
https://www.ziprecruiter.com/Salaries/Work-From-Home-Salary#Weekly - Global Workplace Analytics. “How many people could work from home”
https://globalworkplaceanalytics.com/how-many-people-could-work-from-home - Zippia. Remote work statistics
https://www.zippia.com/advice/remote-work-statistics/ - FlexJobs. Top states with the most remote jobs
https://www.flexjobs.com/blog/post/top-states-with-the-most-remote-jobs/ - McKinsey Global Institute. “Empty spaces and hybrid places” chapter
https://www.mckinsey.com/mgi/our-research/empty-spaces-and-hybrid-places-chapter-1#/ - Statista. Availability of remote work by education in the U.S.
https://www.statista.com/statistics/1320088/availability-remote-work-by-education-us/ - Upgraded Points. Article about what remote workers do on the clock
https://upgradedpoints.com/news/what-are-remote-workers-doing-on-the-clock/