Ability To Work From Home: Evidence From Two Surveys And Implications For The Labor Market In The COVID-19 Pandemic

For the NLSY79, our telework measure is derived from individual responses to a question about the number of hours per week respondents usually worked at home while at their current or most recent employer. Some workers in the NLSY79 work at home just a few hours a week, and, for our present purposes, it is not useful to designate them as teleworkers.

During a pandemic, teleworking is a realistic alternative to working onsite only if individuals can work at home on a nearly full-time basis or at least for a considerable number of hours. In the ATUS, we address this issue by classifying workers as teleworkers only if they worked entirely at home on some days.

In the NLSY79, we classify workers as teleworkers only if they usually worked at home at least 8 hours a week, which roughly corresponds to working at home for a full day.⁹

As shown below, with this restriction, the NLSY79 data look very similar to the ATUS data. Like the ATUS, the NLSY79 has information on a worker’s age, gender, race, ethnicity, and marital status; the presence of children in the household; and the worker’s job status (full or part-time).

As with the ATUS, we merge the O*NET-based telework feasibility measure with data from the NLSY79.¹⁰ The results are summarized in table A-2 of the appendix.

The estimates for the ability-to-telework rate, the classification error rate, and the takeup rate are presented in table 1. As shown in the table’s fourth data column, approximately 45 percent of workers in the NLSY79 sample are in occupations in which working at home is feasible.

The classification error rate, shown in the fifth data column, is about 6 percent, just a tad higher than the rate for workers of comparable age in the ATUS.

Looking at other entries in the fourth data column of Table 1, one sees estimates that are quite similar to those obtained from the ATUS. Workers with less education are concentrated in jobs in which working from home is generally not feasible.

Black, Hispanic, male, unmarried, and part-time workers also are more likely to be in jobs in which teleworking is not feasible.

Working at home is generally feasible in management, professional, and administrative support jobs, but not in most service, sales, farming, construction, and transportation jobs.

Similar to the occupation results, the industry results obtained from the NLSY79 largely mirror those obtained from the ATUS.

Round 27 of the NLSY79 also added variables based on individual responses to questions about the nature of a worker’s job duties.

Looking at these variables, which are similar to those in O*NET, suggests that lower-skilled jobs with repetitive tasks are typically jobs in which telework is not feasible (according to the O*NET criteria).

The same is true for jobs that require physical tasks or contact with patients and, to a lesser extent, for jobs that involve personal contact with customers.¹¹

Takeup rates in the ATUS and the NLSY79

As shown in appendix table A-1, about 44 percent of workers in the ATUS sample are in jobs in which telework is feasible. However, because only about 11 percent of workers in the sample (1) are in jobs in which telework is feasible and (2) did work at home, the takeup rate is only about 25 percent.

As seen in the third data column of Table 1, the takeup rate is higher for more educated workers, workers in full-time jobs, and men, and it is lower for Hispanics.

Examined by age group, the takeup rate is the highest for workers ages 25 to 54 and the lowest for workers younger than 25. Workers in larger metropolitan areas have a higher takeup rate, as do workers in management, professional, and sales occupations.

Similarly, the industry estimates indicate higher takeup rates in the information industry and the professional and business services industry. The takeup rate is quite low in service occupations and office and administrative support occupations.

Turning to the NLSY79 and looking at the sixth data column in table 1, one sees that the overall takeup rate is a little less than 22 percent, comparable to the rate for workers of similar age in the ATUS. The other entries in the column show basic patterns similar to those in the ATUS.

The takeup rate is lower for Hispanics and workers with less education. It is higher for men and people with children in the household.

The takeup rate is very low in service occupations and office and administrative support occupations, and it is higher in jobs that involve more complex cognitive tasks such as frequent problem solving and reading long documents.

The most striking feature of the takeup rate estimates is that they are so low. As noted earlier, the overall takeup rate is 25 percent in the ATUS sample and 22 percent in the NLSY79 sample, whose respondents are older, on average.

Even for the groups with the highest takeup rates, these rates generally top out at around 30 percent. However, both anecdotal reports and the evidence provided by Brynjolfsson et al. indicate that, in response to the COVID-19 pandemic, takeup rates are much higher than this percentage.¹²

Two factors determine the takeup rate: the employers’ willingness to let workers telework and the workers’ desire to work at home when they are offered the opportunity.¹³ There are several possible reasons why employers might be reluctant to let their workers telework.

Working from home may require costly investments in computers or improved internet access. Alternatively, employers might see telework as a job perk given only to the most deserving workers.

Likewise, employers might be concerned about difficulties in monitoring the behavior of employees working at home. (There are reports that employers are now increasing their use of surveillance software to monitor the work habits of their teleworking employees.¹⁴)

As mentioned earlier, the ATUS asks workers not only whether they work at home, but also whether they can work at home. Workers may interpret the latter question as being primarily about the employer’s telework policies.

An affirmative response would then indicate that a formal agreement or an informal understanding with the employer allows workers to work at home.¹⁵

Across the entire ATUS sample, 45 percent of workers who can telework actually do so under our definition. Although this percentage is almost double the takeup rate (as we have measured it), it still indicates that, for whatever reason, a majority of workers choose not to telework when given the opportunity.

It is possible that many workers miss the social interactions at the workplace, forfeiting the time-saving benefits of telework.¹⁶

Implications for the labor market in the COVID-19 pandemic

The COVID-19 pandemic has led to widespread employment losses as businesses have closed, stay-at-home orders have been enacted, and workers and customers have made efforts to avoid close interactions with others.

Teleworking has enabled some workers to continue working while maintaining social distancing. Table 2 presents CPS estimates of the change in employment and unemployment between February and April 2020.

Separate estimates are presented for workers in occupations in which the O*NET-based telework feasibility measure predicts that working at home is feasible. All estimates shown are not seasonally adjusted.¹⁷

The CPS estimates indicate that, overall, employment fell by 16 percent from February to April, and the unemployment rate increased by 11 percentage points. However, employment fell by 21 percent in occupations in which telework is not feasible, compared with 8 percent in occupations in which telework is feasible.

Over the same period, the unemployment rate increased by 14 percentage points in occupations in which telework is not feasible, but only by 6 percentage points in occupations in which telework is feasible.

In a recent article published in the June 2020 Monthly Labor Review, Matthew Dey et al. use a taxonomy developed by Joseph S. Vavra to identify vulnerable industries at the beginning of the COVID-19 pandemic.¹⁸

The authors show that while job losses were widespread throughout the economy from February to March, they were especially severe in these initially vulnerable, or highly exposed, industries.

Table 2 breaks down employment and unemployment estimates for the highly exposed industries and for the remainder of the economy. In the highly exposed industries, workers in occupations in which working at home is not feasible were especially hard hit by the pandemic.

For these occupations, employment fell by 42 percent between February and April, and the unemployment rate rose by 32 percentage points. By comparison, in occupations also located in the highly exposed industries but in which working at home is feasible, employment fell by a still substantial but smaller 22 percent, and the unemployment rate increased by 18 percentage points.

In February, only 15 percent of employment in the highly exposed industries was in occupations in which telework is feasible. As a result, the overall fall in employment in these industries was very large (39 percent) and not far off from the reduction in employment in jobs in which working at home is not feasible.

Table 2. Changes in CPS employment and unemployment statistics, by the ability to telework and industry exposure, February–April 2020

The percent reduction in employment in the remaining industries was substantial, but not nearly as large as that in the highly exposed industries.

However, the same pattern holds here as in the highly exposed industries: the percent reduction in employment and the increase in the unemployment rate were substantially smaller in occupations in which it is possible to work at home.

Specifically, in occupations in which telework is not feasible, employment fell by 15 percent between February and April, and the unemployment rate rose by 9 percentage points. By comparison, in occupations in which telework is feasible, employment fell by 7 percent over the same period, and the unemployment rate increased by 5 percentage points.

In February, 44 percent of employment in the less highly exposed industries was in occupations in which telework is feasible, which moderated both the overall reduction in employment and the increase in unemployment in those industries.

Source: This article was originally published by the Monthly Labor Review of the U.S. Bureau of Labor Statistics.