Remote Work and Team Productivity

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Remote work policies remain controversial mainly because of productivity concerns. The existing literature highlights how the remote setting affects individual productivity yet little is known about how the remote setting affects work in teams - where productivity losses are potentially higher given the additional role of beliefs over partner productivity. Our study closes this gap by examining the effort of individuals randomly assigned to work in either a remote or office setting with partners who are remote and office based. We find that remote workers contribute more effort to the team than office workers, with no differences based on the location of their partners. Office workers incorrectly believe their remote teammates’ contributions will be lower and respond by contributing less effort to the team when paired with remote partners versus office partners. Hence, productivity issues in remote teams are driven by the biased beliefs of office workers rather than true productivity differences, which suggests that managerial policies should focus on correcting these incorrect beliefs rather than limiting remote work.