A GLO Working Paper (Remote Work, Wages, and Hours Worked in the United States by Sabrina Wulff Pabilonia, Ph.D. & Victoria Vernon, Ph.D.) examines wage and hours differential trends for full-time remote and office-based workers. Historically, full-time remote workers consistently earned more than their on-site peers, with the gap widening recently. In 2010, telecommuters had a modest 5.4% wage premium over office-goers. Fast forward to 2021, and this premium has rocketed to 14.2%. This trend isn’t just hourly-based but is also reflected in annual income.
- Remote Workers Earn More: Full-time remote employees saw wage premiums consistently.
- Increase Over Time: In 2010, remote workers earned a 5.4% premium over on-site workers, which surged to 14.2% by 2021.
- Varied by Gender: Wage premiums for remote work appeared less consistent for men than for women from 2012 to 2021.
- Longer Hours Pre-Pandemic: Remote workers, irrespective of gender, worked longer than their on-site counterparts before the pandemic.
- Hours Gap Narrowed: In 2020 and 2021, the difference in work hours between remote and on-site workers was reduced.
Variation by Occupation:
- Wage Gaps Differ: Depending on the profession, some jobs, like sales and management, see remote workers earning more, while others, like healthcare support, face penalties.
- Sales Peak: Sales roles particularly benefited from the productivity boost of remote work.
Differentials in Broad Occupation Groups:
- White-Collar vs. Blue-Collar: Remote white-collar workers consistently saw wage premiums. In contrast, their blue-collar counterparts faced wage penalties until 2021.
- Pandemic Hours: During the pandemic, remote white-collar workers worked slightly fewer hours.
Differentials by Gender and Parenthood:
- General Trends: Remote workers earned more irrespective of gender or parental status.
- Mothers Earn Less: Mothers with young children faced a slightly reduced wage premium when working remotely.
- Fathers Work Less: Remote working fathers clocked fewer hours.
Wage Growth Analysis:
- Initial Difference: Initially, remote workers earned significantly more. But this wage difference vanished by 2019 when considering demographics and industry.
- Positive Correlation: The higher the percentage of remote workers in a profession, the more significant the occupation-level wage growth.
- Remote Workers Earn More: On average, remote workers earn more than their on-site counterparts.
- Wage Surge During Pandemic: Wages grew faster for remote workers during the pandemic.
- Converging Hours: By 2021, remote employees’ working hours will be aligned with on-site workers.
- Marginalized Groups: These groups earned slightly lower returns when working from home, highlighting that the pandemic magnified existing wage inequalities.
Remote work is changing where we work, how much we earn, and how long we work. On average, remote workers out earn their on-site colleagues, with this wage gap growing during the pandemic. We know that working from home is correlated with higher fertility and marriage rates, and this may explain a portion of the higher rates.