Workplace flexibility and worker resilience: the role of teleworkability in the COVID-19 pandemic

Abstract

The unexpected outbreak of COVID-19 has thrown a spotlight on the importance of telework. With the massive lockdown order, teleworkability, i.e., whether workers’ jobs are teleworkable, plays an important role in determining whether workers can maintain their productivity during the pandemic, which in turn has consequences for their resilience to the COVID-induced labor market disruptions. However, the impact of teleworkability is likely to be heterogeneous, varying by internet infrastructure, job characteristics, and worker characteristics, such as gender. In this paper, we examine the average and heterogeneous impact of teleworkability on workers’ resilience to the COVID-induced labor market disruptions in terms of the unemployment rate, work absence rate, and layoff rate. To do this, we compile a rich dataset, including data on different implementation dates of the stay-at-home order across U.S. counties, employment data from Current Population Survey (CPS), broadband coverage data from Federal Communications Commission (FCC), and occupation-based teleworkability and automatability measure based on surveys from O*NET. Using stay-at-home order as a measure of labor market disruption, and leveraging the staggered implementation of the stay-at-home order across counties, we find that teleworkability can offset the increase in the unemployment rate due to the stay-at-home order by 51.5%, that in work absence rate by 54.9%, and that in layoff rate by 51.7%. We further show that the positive effect of teleworkability on workers’ resilience is i) stronger for those living in areas with higher broadband coverage; ii) stronger for those whose jobs are at risk of being automated; iii) stronger for females without kids than their male counterparts. Our study contributes to the emerging literature on how to enhance societal resilience in facing a pandemic by underscoring the nuanced impact of teleworkability.