Journal
INTERNATIONAL JOURNAL OF MANPOWER
Volume 40, Issue 2, Pages 265-285Publisher
EMERALD GROUP PUBLISHING LTD
DOI: 10.1108/IJM-07-2017-0154
Keywords
Wage differentials; Propensity score matching; Teleworking; Switching regression model
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Purpose The purpose of this paper is to investigate the determinants of the probability of being a teleworker and the extent of earnings differentials between teleworkers and traditional employees. Design/methodology/approach The analysis is grounded on a theoretical framework depicting endogenous telework assignment and wage variations based on individual bargaining. The empirical strategy allows for non-random telework assignment, generating from individual- and job-specific observed as well as unobserved factors. Findings Results are based on the Italian labor force survey and uncover a key role of gender, higher education and family composition as determinants of the probability of teleworking. Furthermore, teleworkers enjoy a wage premium ranging between 2.7 and 8 percent. Originality/value Accounting for observed individual and job-specific effects, by both standard linear regression and propensity score matching, largely reduces the extent of wage premium emerging from unconditional descriptives; the results of an endogenous switching regression model however suggest that failing to properly care for unobserved factors leads to the underestimation of returns to telework.
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