Working from Home Promotes Careers of Mothers
Research
Working from home affects childless employees and parents very differently. Childless employees who work from home work on average one extra hour per week of unpaid overtime, while reporting higher job satisfaction. For parents, on the other hand, it is less the number of overtime hours than the contractual working hours that increase when taking up working from home. Thus, on average, mothers work 3.5 hours longer per week and fathers 0.4 hours per week. What is more, the increase in working hours is linked to a 16 per cent rise in earnings for mothers. For fathers, the wage increase is about two per cent. These are the findings of a study conducted by ZEW – Leibniz Centre for European Economic Research in Mannheim.
Working from home plays an ever increasing role in everyday working life as digitalisation progresses. It is therefore important to understand how this relatively new way of working affects employees’ wages, working hours and job satisfaction. To investigate this, ZEW researchers evaluated data from the German Socio-Economic Panel (SOEP), a panel data set containing annual information on more than 20,000 people living in Germany.
For the 1997, 1999, 2002, 2009 and 2014 survey waves, SOEP provides, among other things, information on home-based work arrangements that has been used in the ZEW study. The researchers looked at a total of 7,602 employees between the ages of 20 and 65, 46 per cent of whom were women. They analysed the working habits of people working from home at least once a month. While 14 per cent of them work from home on a daily basis, 45 per cent do so at least once a week and 41 per cent about every two to four weeks.
As the study shows, the proportion of employees working from home has increased over the past twenty years. For men, the share almost doubled from five per cent at the end of the 1990s up to nine per cent in 2014. From four per cent up to more than ten per cent, this increase was even more pronounced among women in the same period. The fact that – unlike at the beginning of the observation period – the proportion of women working from home has exceeded the proportion of men over time seems to be mainly due to mothers taking up working from home. Their share tripled from five per cent to 15 per cent, while the share among fathers only doubled.
Working from home reduces gender gap in working hours and monthly earnings
The results of the study show that employees that occasionally or regularly work from home, on average, are older, are more likely to hold a university degree and to be employed at large companies, earn higher wages, work more overtime and commute longer distances to the work place than employees that do not work from home. Women who take up working from home, in particular, are more likely to have children, since especially after the birth of their first child, many mothers chose to work from home at least occasionally. For men, this correlation is not so pronounced.
In addition, the taking-up of work from home is associated with an increase in hourly wages by an average of twelve per cent for mothers and seven per cent for fathers. However, only mothers who have changed employers at the time of taking up working from home receive a higher hourly wage. Fathers, on the other hand, experience an increase in hourly wages with working from home even if they stay in the same firm. According to the authors of the study, this points to poorer bargaining outcomes for women compared to men when staying with the same employer. In contrast to employees without children, neither for mothers nor for fathers does job satisfaction increase.
“Overall, working from home seems to help mothers stay connected to the labour market. This helps to reduce the gap in working hours and monthly earnings between mothers and fathers. However, policymakers should ensure that the expansion of home-based work arrangements is supported by measures such as the Transparency of Remuneration Act to make it easier for women to claim higher wages from their employers,” says Professor Melanie Arntz, deputy head of the ZEW Research Department “Labour Markets and Human Resources” and co-author of the study.
