Does Working from Home Work: Evidence from a Chinese Experiment

A rising share of employees now regularly engage in working 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 either to work from home or in the office for nine months. Home working led to a 13% performance increase, of which 9% was from working more minutes per shift (fewer breaks and sick days) and 4% from more calls per minute (attributed to a quieter and more convenient working environment). Home workers also reported improved work satisfaction, and their attrition rate halved, 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 reselect between the home and 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.

Policy implications

Encouraging working from home can lead to higher productivity, greater employee satisfaction and lower staff turnover.

Additional information

Hypotheses/research question

What is the effectiveness of the company policy permitting working from home?

Study design

Parallel-group

In 2010, employees in Ctrip, a large, modern Chinese Firm, were informed of the Work From Home (WFH) programme. All employees took an extensive survey, but were not told the criteria needed to participate in WFH. Of the 994 employees in the surveyed departments, 503 volunteered for WFH. The 49% who did not volunteer mentioned concerns of loneliness and the possible negative impact of WFH on promotion. To qualify, the employee needed to have at least 6 months tenure, broadband internet at home, and an independent workspace. 249 employees met the requirements and were recruited. The treatment and control groups were randomised from the group of 249 through a public lottery.

Cost benefit ratio

Greater than 1. Working from home generated an improvement in profitability worth about $2,130 per employee per year

Rounds of data collection

4: Baseline + 2 follow-up surveys during the experiment (at 12 months and 20 months) + 2 endline surveys (at 2 years after start of intervention, and approx. 3.5 years after the start of intervention)

Baseline data collection and method

Ctrip's database provided performance measures and histories of employees, and was combined with the initial survey.

Data collection method and data collected

Ctrip's comprehensive database included 7 categories of data used in the study: performance, labour supply, attrition, promotions, reported employee work satisfaction, detailed demographic information, and survey information on attitudes toward the programme. Much of this data was collected daily; surveys were conducted in 2 waves during the experiment.

Unit of analysis

Individual

Stratification

Delivery partner

Ctrip International

Reference

Bloom, N., Liang, J., Roberts, J. & Ying, Z. J., 2015. 'Does Working from Home Work? Evidence from a Chinese Experiment'. The Quarterly Journal of Economics, vol. 130, pages 165-218.

Does Working from Home Work: Evidence from a Chinese Experiment

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Key facts

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