Nicholas Bloom Discusses the Future of Work from Home

Stanford economics professor Nicholas Bloom joined Prof Nirvikar Singh, University of California, Santa Cruz, to discuss the future of work on the Ideas for India podcast. Since the onset of the COVID-19 pandemic, work from home became the norm in 2020 for many employees. Now, in 2022, even though pandemic restrictions have been lifted, many workplaces all over the world continue to follow a model of remote or hybrid work. This has raised questions about worker productivity and equity, work-life balance, and the future of commuting and cities.

Professor Bloom is widely known for his research on remote work and best management practices.

Back in 2015, along with colleagues James Liang, John Roberts, and Zhichun Jenny Ying, Professor Bloom conducted a 9-month working-from-home experiment with Ctrip, China’s largest travel agency. The resulting report, “Does Working from Home Work? Evidence from a Chinese Experiment,” published in the Quarterly Journal of Economics, called attention to several benefits of working from home. A few key takeaways: the experiment led to a 13 percent increase in performance and a 50 percent drop in employee-quit rates. It was so successful that Ctrip rolled out working from home as an option for the whole firm.

Fast forward five years to the global pandemic, numerous organizations pivoted to establish work-from-home (WFH) systems and routines for their employees. In May 2020, a few months after many countries and states began issuing “stay-at-home” orders, Professor Bloom joined with Jose Maria Barrero, Instituto Tecnológico Autónomo de México (ITAM), and Steven J. Davis, University of Chicago Booth School of Business, to establish the Survey of Working Arrangements and Attitudes. This research group was formed in response to the dramatic impact of COVID-19 on the economy and working arrangements. The professors and their colleagues conduct monthly online surveys to collect detailed information on WFH challenges and benefits.

In “The Future of Work from Home,” Professor Bloom shares his research and expertise on remote work. Below is an overview of the podcast conversation.

“The Future of Work from Home” with Professors Nicholas Bloom and Nirvikar Singh. Produced by International Growth Center’s Ideas for India, recorded July 28, 2022.

Summary

Working from home during the pandemic proved successful for both firms and employees. Policymakers in developing countries could take advantage of this opportunity by developing electrical and broadband infrastructure.

Main Points

• Employees working from home are more productive, happier, and less likely to quit.
  • During the pandemic about 50 percent of workers in the United States and about 20 percent of those in India worked from home.
  • Home workers typically work more minutes per day and do more work per minute.
  • Most workers prefer a hybrid model, working from home two or three days per week.
  • Workers view the opportunity to work from home as equivalent to a pay raise.
  • Work from home expanded most in nations with spacious housing.
• Home workers are promoted less often than those remaining in the office, but firms can address this by ensuring that entire teams work from the office on certain days.
• The benefits of working from home tend to go to the most educated workers, angering some (such as hospital shift workers) who cannot work from home; however, employers are offering more flexibility or more pay to on-premises workers to compensate.
• The growth of work from home increases demand for spacious housing in the suburbs.
  • Some office space in city centers could be converted to housing, reducing housing prices.
  • Research is needed to determine whether working from home will reduce pollution and energy consumption.
• The shift to work from home during the pandemic may spur economic growth in the long run, because of innovation related to work from home.
  • The labor supply will increase, particularly the supply of part time workers such as mothers of young children.
  • Many hardware and software firms have filed patents related to work from home.
• An increase in work from home will benefit India and other developing countries, because outsourcing of full-time at-home work such as IT support will increase. Policymakers in nations like India could capture these benefits by supporting development of electricity and broadband, and by removing tax and regulatory obstacles to work from home.

Conclusion

Studies show that work from home during the pandemic was surprisingly successful for both firms and employees. Firms can ensure that employees working from home are not overlooked for promotion by ensuring that the same work-from-home policy is applied company-wide. Increased work from home is an opportunity for developing nations like India, as outsourcing will increase. Work from home may encourage more women with children, disabled people, and older workers to remain in the labor force. During the pandemic, many firms invested in hardware and software innovation related to work from home; in the long run, this will foster economic growth. Research is needed to explore the affect of work from home on the environment.

“The Future of Work from Home” with Professors Nicholas Bloom and Nirvikar Singh. Produced by International Growth Center’s Ideas for India, recorded July 28, 2022.

Nicholas Bloom is the William Eberle Professor of Economics at Stanford University. His research focuses on working from home, management practices and uncertainty. He previously worked at the UK Treasury and McKinsey & Company. Professor Bloom is a Fellow of the American Academy of Arts and Sciences, and the recipient of the Guggenheim and Sloan Fellowships, the Bernacer Prize, the Frisch Medal and a National Science Foundation Career Award. He has a BA from Cambridge, an MPhil from Oxford, and a PhD from University College London.

Read More of Professor Bloom’s Research on Work from Home:

• “Nicholas Bloom Shares WFH Research and the Business Impact of Hybrid Work” (TAP, September 16, 2022)
• “Nicholas Bloom Explains the “Donut Effect” and Policy Concerns for Cities” (TAP, December 3, 2021)
• “Stanford’s Nicholas Bloom Advises Managers to Decide Which Days Their Teams Work from Home” (TAP, August 13, 2021)
• “Hybrid Is the Future of Work” by Nicholas Bloom (Stanford Institute for Economic Policy Research (SIEPR), June 2021)
• “Nicholas Bloom Discusses the Ups and Downs of Remote Work” (TAP, October 26, 2020)
• “Covid-19 and the Workplace Revolution” by Nicholas Bloom (TAP, August 4, 2020)
• “Does Working From Home Work?” by Nicholas Bloom (TAP, June 9, 2016)
• “Does Working from Home Work? Evidence from a Chinese Experiment” by Nicholas Bloom, James Liang, John Roberts, Zhichun Jenny Ying (Quarterly Journal of Economics (2015), 165–218, March 2015)