Key Findings

  • A working paper published by the National Bureau of Economic Research (NBER) notes that in "family-unfriendly" occupations such as finance and business, firms offering family-friendly flexibility like remote work can reduce the economic and career losses women face due to having children.
  • The remote work trend has expanded the scope of family-friendly occupations, transforming "a range of high-paying, high-growth occupations into positions more compatible with mothers' family lives," the researchers state in the paper.
  • "The expansion of family-friendly occupations is expected to reduce gender inequality in the labor market," they add.

In-Depth Analysis

A growing number of companies are gradually rolling back flexible work policies established during the pandemic and guiding employees back to the office. According to swipe card data from Kastle Systems, the average occupancy rate of office buildings in the top ten U.S. cities has risen from below 20% in early 2022 to 52.3% this month.

The return-to-office trend appears set to continue. KPMG's CEO sentiment report released last year shows that nearly four in five CEOs (79%) believe employees in roles traditionally performed in the office should return to on-site work by 2027. KPMG states that CEOs are "increasingly leaning toward full-time office return, but demand for flexibility remains."

Among U.S. employees who can work remotely, 51% use a hybrid model (combining office and remote work), 21% work entirely in the office, and 28% work fully remotely, according to Gallup, citing May data.

"Although the future of remote work remains uncertain, large-scale survey evidence indicates that the prevalence of remote work is stabilizing at more than double pre-pandemic levels," the NBER paper's researchers say.

U.S. employees highly value remote work. According to another NBER paper published this year, employees are willing to accept up to a 25% pay cut on average in exchange for fully or partially remote work rather than purely office-based roles. In their study of tech industry workers' preferences, the researchers found this acceptable pay cut to be three to five times larger than previously measured. "We partly attribute this difference to methodological variations, suggesting that existing methods may underestimate employees' preference for remote work," they write.

The authors of the recent NBER paper on the "motherhood penalty" argue that the prospect of remote work may prompt young women to set higher educational and career goals. "Women's expectation that they can work remotely after becoming mothers may strengthen their incentive to invest in education, choose degrees leading to high-growth careers, and accumulate firm-specific human capital once employed," they write. "By decoupling women's career choices from expected fertility, remote work may allow women to optimize career paths just like men."

The researchers also note that remote work policies increase firms' incentives to invest in training female employees, because women are more likely to stay with the company after becoming mothers rather than quitting to focus on childcare.