Mar. 15, John Roberts, Ph.D. – Does Working From Home Work?  Evidence from a Chinese experiment

Abstract: About 10% of US employees now regularly work from home (WFH), but there are concerns this can lead to “shirking from home.” We report the results of a WFH experiment at CTrip, a 16,000- employee, NASDAQ-listed Chinese travel agency. Call center employees who volunteered to WFH were randomly assigned to work from home or in the office for 9 months. Home working led to a 13% performance increase, of which about 9% was from working more minutes per shift (fewer breaks and sick-days) and 4% from more calls per minute (attributed to a quieter working environment). Home workers also reported improved work satisfaction and experienced less turnover, but their promotion rate conditional on performance fell. Due to the success of the experiment, CTrip rolled-out the option to WFH to the whole firm and allowed the experimental employees to re-select between the home or office. Interestingly, over half of them switched, which led to the gains from WFH almost doubling to 22%. This highlights the benefits of learning and selection effects when adopting modern management practices like WFH.

Bio: John Roberts is the John H. Scully Professor emeritus of Economics, Strategic Management and International Business at the Stanford Graduate School of Business. A fellow of the American Academy of Arts and Sciences and of the Econometric Society, he is probably best known for his contributions to game theory and its applications in industrial economics. He recently co-edited The Handbook of Organizational Economics, a subject he has studied for the last 20-plus years. In the last five years he has carried out two major field experiments on changing management practices in large firms.

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