In many countries formal, professionally managed establishments have significantly higher productivity than informal work arrangements which are often conducted from home. To understand the impact of these establishments on productivity we use a field experiment in India to test how much of the effect is due to a causal treatment effect versus workers self-sorting into more productive work arrangements. We find a strong positive treatment effect of working from the office, but negative sorting on productivity. Even productive employees choose working from home despite the negative treatment effect, especially if they have domestic responsibility such as child care. The effect is stronger for women and families with children.
Contact Person: Marina Chugunova