Working from home, with reduced commuting time and costs and childcare advantages has become a widely available financial and non-financial benefit for people in occupations that are already relatively well-paid. We wanted to test the concern that unequal access to this ‘perk’ would further widen inequality.
Professor Paul Mizen
29 October 2024
Working from home hasn't widened inequality
New research finds that the now widespread availability of remote work since the pandemic has been offset by larger pay increases for those who are unable to work remotely.
A team from King’s Business School, the Universities of Birmingham, Kent, Nottingham and Sheffield have studied the effect that the availability of remote work has had on the pay of UK workers since 2019.
The research team used a survey completed by 2,500 respondents every month since January 20211 to understand the financial value that workers placed on the ability to work from home. They found that workers, on average, valued the benefit of working from home as roughly equivalent to 8% of wages. Women, younger, better paid, and better educated workers as well as those with more demanding commutes typically placed a higher financial value on the ability to work remotely.
However, the team found that remote workers did not get a double financial boost from their new flexibility as their salary growth tended to lag others who could not work remotely. The team’s analysis of UK Labour Force Survey data showed that since 2019, the pay of those in occupations where remote working is available grew by between 2% and 7% less than the pay of those in occupations where remote working is not available.
At first glance, it seems remote work will increase inequality by offering a perk to those already better off. But our inequality decomposition shows that while the option to work remotely primarily benefits workers in higher-paid jobs, the lower wage growth in these occupations fully offsets this effect.
Professor Paul Mizen
The team add that monitoring wage growth over future years will show whether this gap in pay growth was a one-off adjustment to wages reflecting the newly widespread availability of the remote work benefit, or a more general trend arising from a relative scarcity of candidates for jobs where remote work is not possible.
- The Survey of Working Arrangements and Attitudes
Further information
Read the working paper 'Remote Work and Compensation Inequality'
In this story
Professor in Economics