Teleworkers in Italy: who are they? Do they make more?

Abstract

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.

Citation

Pigini, C. and Staffolani, S. (2019), "Teleworkers in Italy: who are they? Do they make more?", International Journal of Manpower, Vol. 40 No. 2, pp. 265-285. https://doi.org/10.1108/IJM-07-2017-0154