Teleworkability and its heterogeneity in labor market shock

Abstract

The rapid development of information and communication technologies has brought about a marked change in work patterns, with teleworking emerging as a vital and complementary form of employment. The COVID-19 outbreak in 2020 led to widespread social isolation, accelerating the adoption of teleworking. Following Dingel and Neiman (2020), we construct a teleworkability index for over 4539 employees and analyze the dynamic changes in their working status in China. Our findings suggest that business and technical workers are more likely to work remotely than essential labor workers. Highly educated female workers who live in the southeast of China show the advantage of working from home. Further regression estimation indicates that, throughout 2020, workers with a higher teleworkability index can better cope with adverse shocks from the pandemic with higher return-to-work rates and higher productivity. In contrast, those with a lower teleworkability index face challenges in job retention and suffer from higher unemployment rates and severe income losses. In addition, the teleworkability index is positively associated with mental health status. This study highlights the most vulnerable segment in the labor market, those with low teleworkability, should be well targeted by the social security system.