This is one of a series of interviews by Bloomberg Opinion columnists on how to solve the world’s most pressing policy challenges. It has been edited for length and clarity.
Justin Fox: The remote work revolution unleashed by the pandemic has brought huge changes in the labor market, with social and economic implications that we’ll be dealing with for generations. You’ve been one of the most important chroniclers and analysts of this phenomenon. But you started looking at it well before March 2020, right?
Nicholas Bloom, William D. Eberle Professor of Economics, Stanford University: I started working on this in 2004. At that point I’d already been doing a lot of work on management practices, and I began to notice that what I call being-nice-to-people practices—maternity leave, paternity leave, job sharing, part-time, work from home—vary tremendously. It felt strange because management practices seemed to be norming towards the view that you have performance evaluation data, provide people good targets, reward them if they meet the targets, get them training if they fail to. But there didn’t seem to be any consensus on, what’s the right length of maternity leave? What’s the right degree of work from home? And I thought, the first step is just to collect data on what actually exists out there.
JF: What did you find? Was there a specific set of policies that worked better?
NB: I found that pro-work-life-balance policies—maternity leave, job sharing, part-time work and work from home—were positively correlated with good management and positively correlated with good firm performance. It’s impossible to tell what causes what, but firms that perform well appear to have more progressive policies toward their employees.
JF: I’m most aware of this paper you published in 2015 that explicitly looked at remote work in terms of productivity. How did that come about?
NB: That was a classic Stanford experience. I’m teaching my Ph.D. second-year labor class, which is applied statistics, using datasets to look at interesting topics. I discover about a quarter of the way through that one of the people sitting at the back of the class is the co-founding CEO and, at this point, chairman, of Ctrip.com [now Trip.com], one of the world’s largest travel agents. I was kind of amazed and surprised, and started talking to him. James Liang, the student, said, “We’re thinking of evaluating work-from-home because office space in Shanghai is very expensive and we have this large call center.” I was like, “That sounds great, I’d love to get involved.” We went on to run a 250-person randomized controlled trial.
Going into the study, the company’s view was that work from home would save space but come at a productivity cost: working from home, shirking from home. The joke back then was that the three great enemies of work from home are the bed, the television and the fridge.
When the experiment was up and running and we started to see the data, we were astounded to see that productivity was up, not down. Maybe in 2022 it doesn’t seem surprising, but back then in 2011, it was pretty amazing. Productivity was up 13% for the people working from home, which is a huge improvement. Of that 13% increase, about two-thirds was due to the fact they were working more minutes because they were late less, and took shorter lunch and toilet breaks. Then one-third was that they were more productive per minute.
At the end of the experiment the company said everyone working in the call centers could work from home. But the uptake was low. By 2020, pre-pandemic, there were only 50, 60 employees left doing it. I asked James Liang why, and he said there was a negative stigma associated with volunteering to work from home. There’s a paper by [Natalia] Emanuel and [Emma] Harrington showing the same thing in U.S. call centers pre-pandemic. People are about 10% more productive when they work from home, but there’s about a minus 10% selection effect. The pandemic obviously changed all of this because everyone was doing it. Now this negative stigma has disappeared and it’s become normalized.
In July 2021, I met James for dinner in London. He said, “We’re running another big experiment, this time on hybrid, would you be interested in getting involved?” I jumped at the chance. They took 1,600 people that are coders, finance and marketing professionals—around 25% managers—and randomized between fully in the office and working from home two days a week.
The results came in in February 2022, and they showed productivity performance is about flat. Maybe a mild positive, but nothing substantive. The big benefit was that quit rates dropped by a third and employees’ job satisfaction, work-life balance and intention to stay in the firm were significantly higher.
JF: You’re at home right now. Have you worked from home all along?
NB: I actually have a very unusual working pattern. I live on the Stanford campus so I have about a five-minute commute. Even before the pandemic, I worked hybrid, as in 50% at home, 50% in the office, but I tended to go in every day. There’s a range of activities I do each week that are definitely better in person: research seminars, teaching, advising students. Then there are other activities that I prefer to do at home: quietly working on data, writing, reading, Zoom calls with collaborators in different locations.