Mismatch in preferences for working from home – evidence from discrete choice experiments

Working from home became widespread during the COVID-19 pandemic, but workers’ and employers’ preferences towards it may diverge when the world of work “returns to normal”. We study workers’ and employers’ willingness to pay for working from home using discrete choice experiments with more than 10,000 workers and more than 1,500 employers in Poland. We randomised wage differences between otherwise identical home- and office-based jobs and between otherwise identical job candidates. We found that demand for working from home was substantially higher among workers than among employers. Most workers would prefer to work from home if offered the same wage for a home-based job as for an office-based job, while most employers would prefer to hire an office-based worker. On average, workers would sacrifice 5.1% of their earnings for the option to work from home, especially for 2-3 days a week (7.3%) rather than five days a week (2.8%). On average, employers expect a wage cut of 40.7% from candidates who want to work from home. This gap in the valuations of WfH reflects mainly the additional effort required from managers, followed by their assessments of productivity loss resulting from WfH, and the discrepancy between employers’ and workers’ valuations of benefits that WfH offers workers. Only among the minority of employers who find that working from home brings productivity gains, managers’ valuation of working from home aligns with workers’ willingness to pay for it.