Megan McCoy Dowdy

Job market paper

Wage Returns of Workplace Flexibility

There has been an increased interest in the provision of various types of job flexibility offered by firms. Using nationally-representative data from the United States, this paper estimates the wage returns to flexibility in work location (i.e. teleworking, working from home) across two dimensions: occupational-level access to telework policies and individual-level instance of working from home. The hedonic wage equation is estimated jointly with equations modeling the selection into both dimensions of flexibility while allowing for unobserved individual heterogeneity. Results show that both concepts of flexibility have a wage premium, but the magnitude of the premium varies with gender. Further analyses indicate that the gender wage differences in access to flexibility are not driven by heterogeneous preferences for flexibility, but the discrepancies in utilization of flexibility may be caused by productivity differences.